On January 1st, 2009 the Washington State Minimum Wage will increase by 48 cents. The new minimum wage will be $8.55. The current minimum wage is $8.07.
Washington State’s new minimum wage will still be the highest in the country. Oregon’s minimum wage will go to $8.40 on Jan 1, 2009. California, Connecticut and Massachusetts’s minimum wage will all be $8.00 in 2009. Montana’s 2009 minimum wage will be $6.90 and Idaho will be at $6.55.
Washington’s minimum wage is adjusted each year to make a cost of living adjustment based on the Federal Consumer Price Index for Urban Wage Earners and Clerical Workers. (CPI-W). This is done every September by the Washington State Department of Labor and Industries.
As we noted in a previous post on this year’s minimum wage,
The wage adjustment takes place each year because in 1998 Washington voters passed Initiative 688. with a 66% yes vote. The initiative is fairly brief but it was the first in the nation to require that the minimum wage be increased each year to reflect any increase in inflation.
The current Federal minimum wage is $6.55 and will go to $7.25 on July 24, 2009. For 10 years the national minimum wage was stuck at $5.15. Increasing the minimum wage was the first thing Democrats did when they took control of both houses of Congress in 2007.
Unfortunately while more and more states are indexing their state minimum wages to inflation like Washington State did, the national minimum wage bill passed by Congress in 2007 did not index it to inflation. This is a task next year’s Congress and President Obama must remedy by passing new legislation to index the Federal Minimum Wage to inflation.
As the Economic Policy Institute in 2005 noted:
Without an automatic inflation adjustment, states are forced to go through a
political process each year to guarantee workers’ living standards from year to
year. Indexing for inflation provides a sustainable solution to the problem of
declining real wages for the lowest-paid workers and should be enacted at both
the state and federal level.
Congress is forced to go through a political process each time it wants to raise the Federal minimum wage. Now that the Democrats control Congress and the White House it is time to update the Federal Minimum Wage Law by indexing it to inflation and adjusting it annually.
This is done for Social Security and eliminates increases being tied to politics. In 2007 to get support from Bush and conservatives in Congress the minimum wage increase was accompanied by some $4.8 billion in tax breaks for business. Yet studies have consistently shown that minimum wage laws do not negatively impact businesses in any serious way.