13 States To Give Minimum Wage A Boost In 2014

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2.5 million low-paid workers to receive a pay raise as a growing number of states raise the minimum wage in the face of Congressional inaction

After a year when thousands of low-wage workers staged historic strikes to demand higher pay in the retail and fast-food industries, and after escalating calls from President Obama and Congressional Democrats to raise the federal minimum wage for the first time in four years, the new year will begin with 13 states implementing minimum wage increases that are estimated to boost the incomes of 2.5 million low-paid workers, according to an analysis of Census data by the Economic Policy Institute.

Four of these states – Connecticut, New Jersey, New York, and Rhode Island – passed laws to raise the minimum wage earlier this year, while the remaining nine states – Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont, and Washington – are adjusting their minimum wages in accordance with state laws requiring automatic annual increases to keep pace with the rising cost of living. (California, which also passed a law this year to raise its minimum wage, will raise its minimum wage in July).

The increases will generate an additional $619 million in new economic growth as low-paid workers spend their increased earnings on basic necessities like food, gasoline, and housing.

“As Congress drags its feet on raising the federal minimum wage, more and more Americans are earning poverty-level wages in expanding industries like retail and fast food,” said Christine Owens, executive director of the National Employment Law Project. “In the face of federal inaction, states are boosting the paychecks of the lowest-paid workers, promoting growth and consumer spending, and hopefully providing an example for Congress to follow.”

After a year when thousands of low-wage workers staged historic strikes to demand higher pay in the retail and fast-food industries, and after escalating calls from President Obama and Congressional Democrats to raise the federal minimum wage for the first time in four years, the new year will begin with 13 states implementing minimum wage increases that are estimated to boost the incomes of 2.5 million low-paid workers, according to an analysis of Census data by the Economic Policy Institute.

Four of these states – Connecticut, New Jersey, New York, and Rhode Island – passed laws to raise the minimum wage earlier this year, while the remaining nine states – Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont, and Washington – are adjusting their minimum wages in accordance with state laws requiring automatic annual increases to keep pace with the rising cost of living. (California, which also passed a law this year to raise its minimum wage, will raise its minimum wage in July).

The increases will generate an additional $619 million in new economic growth as low-paid workers spend their increased earnings on basic necessities like food, gasoline, and housing.

“As Congress drags its feet on raising the federal minimum wage, more and more Americans are earning poverty-level wages in expanding industries like retail and fast food,” said Christine Owens, executive director of the National Employment Law Project. “In the face of federal inaction, states are boosting the paychecks of the lowest-paid workers, promoting growth and consumer spending, and hopefully providing an example for Congress to follow.”

The Fair Minimum Wage Act of 2013, supported by President Obama and introduced in the U.S. Senate and House of Representatives earlier this year, would raise the federal minimum wage to $10.10 per hour and adjust it annually to keep pace with the rising cost of living. The Fair Minimum Wage Act would also gradually raise the minimum wage for tipped workers from its current low rate of $2.13 per hour, where it has been frozen since 1991, to 70 percent of the full minimum wage.

At the local level, San Francisco will also increase its minimum wage on New Year’s day, to $10.79 per hour, along with San Jose, which will boost its wage to $10.15 per hour, in accordance with city statutes requiring annual inflation indexing. The city of SeaTac, Washington, will establish a $15 per hour wage for airport-related hospitality and restaurant occupations, following a ballot measure approved in November.

As of January 1st, 2014, 21 states, including the District of Columbia, will have minimum wage rates above the federal level of $7.25 per hour, which translates to just over $15,000 per year for a full-time minimum wage earner.

The most rigorous economic research over the past 20 years shows that raising the minimum wage boosts worker pay without causing job losses – even in regions where the economy is weak or unemployment is high. A recent study by the Center for Economic and Policy Research reviews the past two decades of research on the impact of minimum wage increases on employment and concludes that “the weight of the evidence points to little or no effect of minimum wage increases on job growth.” An April 2013 poll found that 67 percent of small business owners support raising and indexing the minimum wage, indicating that the majority believe an increase will help boost economic growth.

The following table lists the states with increases, amount of increase, the new wage on January 1, 2014, the total workers directly and indirectly affected, and the GDP impact of each minimum wage increase:

Minimum wage increases 2014

 

The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org or www.raisetheminimumwage.org.