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I'm pro jacking it way the fuck up as we move through income tiers. We could just have such nice things if we raised taxes.
Ideally I'd like to see federal incentives tied to states tying their minimum wage to local COL, and significantly higher progressively-increasing taxes on everyone from the third quintile up.
Then just change all welfare that isn't a training/education program to straight cash and we are cooking with gas.
I'd say fourth quintile but I'm personally biased and I do agree with pretty much everything you're saying. It's wild to me that we have a flat constant as the minimum wage and not a formula that takes into consideration your district's cost of living. Ideally we'd have:
Min Wage for District A = Federal Constant + k*Cost of Living in A
It would need to be coupled with some sort of gerrymandering prevention so that districts were more representative of state areas. You'd need large cities to be their own district in this scheme.
I don't think voting districts and localized COL need to be tied together, but I'd sell a kidney to fix the gerrymandering shit so yeah, still agreed.
It's the best way I can think of defining an area for CoL without screwing someone over. On the state level it would be heavily skewed still. Maybe counties?
County is def how I would do it. They're more localized and self-governing and can more quickly make adjustments as needed.