The Flying Machine

There's a great piece in today's Times about the minimum wage - anecdotal, of course, but an interesting case study about two towns on the ID - WA border. Idaho has the federal minimum wage, $5.15, and Washington has the highest in the country - just under $8.

Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.

But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits.

Idaho teenagers cross the state line to work in fast-food restaurants in Washington, where the minimum wage is 54 percent higher. That has forced businesses in Idaho to raise their wages to compete.

(Read the whole thing!)

You see something similar here on the Oregon border, where the minimum wage is also higher than it is in Idaho.