Legal Scholarship: Localizing minimum wage laws: a rural perspective

Travis Andrews published this essay in the Cornell Law Review Online.  The abstract follows: 

Since launching in 2012, the Fight for 15 movement has successfully lobbied for a $15 per hour minimum wage in many urban localities. Today, more than 50 localities have their own minimum wage laws that set a rate higher than state or national pay floors. Two of the primary justifications for raising the minimum wage are based on a nationwide surge in income inequality and the inability of a full‑time minimum‑wage employee to earn enough money to keep a family above the poverty line.

A significant amount of legal scholarship has examined whether localities have or should have the ability to pass minimum wage ordinances. The common theme in most scholarship is the focus on cities—which makes sense, given that the movement for a higher minimum wage has been mostly confined to urban areas. But remarkably little attention has been paid to the reverse issue: whether across‑the‑board minimum wage hikes, based on urban areas’ high cost of living and income inequality, are necessary or desirable in nonurban areas. Recent proposals by congressional Democrats and the Biden administration to increase the federal minimum wage ignore the impact of uniformly raising the minimum wage on rural small businesses and employment—a problem that Democratic U.S. Senator Joe Manchin of West Virginia has hinted at in his opposition to a $15 per hour minimum wage. Of course, it is not only Democrats who support increasing the minimum wage. In fact, nearly one-third of Republican voters support a higher minimum wage, and voters in Republican-leaning Florida approved a ballot initiative in 2020 to raise the state’s minimum wage to $15 per hour by 2026.

This Essay addresses some of the issues that universal minimum wage rates pose for rural areas. A modest hike in the minimum wage for all workers is debatable; what seems less justifiable are the calls for a $15 per hour minimum wage in nonurban areas, which generally have less income inequality and a much lower cost of living than the nation’s largest metropolitan areas. Herein lies the problem with minimum wage laws as we have come to know them: they are one‑size‑fits‑all prescriptions, whether at the national or state level. This model ignores the vast differences in the economies of nonurban and urban areas. Put simply, a blanket minimum wage, whether federal or statewide, risks disproportionately harming growth and employment in nonurban areas—particularly as these communities try to recover from the COVID-19 pandemic.

This Essay contains three sections. Part I argues why the common justifications for a significant minimum wage increase are weaker in nonurban areas. Part II explains why nonurban areas are likely to be disproportionately and negatively affected by a large increase in the national or state minimum wage. Part III concludes with a few brief proposals for creating more precise minimum wage laws.