On Jan. 1, 2013 Washington State’s minimum wage increased by 15 cents to $9.19 per hour. Washington State’s minimum wage is the highest in the country. Nine other states minimum wages were also increased on Jan 1, 2013. As noted in the Huffington Post:
Nearly a million low-wage workers will see their earnings rise because of the increases, most of which come courtesy of state cost-of-living adjustments that account for inflation. Washington State will once again have the highest minimum wage in the nation, at $9.19 per hour, after a raise of 15 cents for the new year. The other states raising their wage floors are Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island and Vermont.
The federal minimum wage remains $7.25 per hour, with no cost-of-living adjustment, and prevails in 31 states that do not mandate a higher state minimum wage. The last raise to the federal minimum came in 2009, after a series of increases signed into law by President George W. Bush.
The increase in the state minimum wages are as follows:
Washington State – increased 15 cents to $9.19/hr
Arizona – increased 15 cents to $7.80/hr
Colorado – increased 14 cents to $7.78/hr
Florida – increased 2 cents to $7.69/hr
Missouri – increased 10 cents to $7.35/hr
Montana – increased 15 cents to $7.80/hr
Ohio – increased 15 cents to $7.85/hr
Oregon – increased 15 cents to $8.95/hr
Rhode Island – increased 30 cents to $7.75/hr
Vermont – increased 14 cents to $8.60/hr
Except for Rhode Island’s minimum wage increase approved by their Legislature last year, the rest of the increases were the result of state laws indexed to inflation and the consumer price index. Nevada, which also adjusts their minimum wage based on inflation, makes their changes on July 1st and is not included in the current list above.
Washington state was the first state to index their minimum wage to inflation when they passed Initiative 688 in 1998. Oregon followed with an initiative in 2002 and Florida in 2004. In 2006 there was a big push nationally to index the minimum wage to inflation, with voters in Arizona, Colorado, Missouri, Montana and Ohio passing minimum wage initiatives.
The US Department of Labor has a color coded map which breaks out state’s minimum wages by categories. Amazingly five states – Louisiana, Mississippi, Alabama, Tennessee, and South Carolina – have no state minimum wage laws. Four states – Georgia, Arkansas, Wisconsin and Wyoming – have a state minimum wage lower than the federal minimum wage of $7.25. Twenty states have a minimum wage higher than the federal minimum wage of $7.25 and the rest of the states set their minimum wage at the Federal level.
Legislation has been before Congress to try to index the federal minimum wage to inflation, the same as Washington State does, but Republicans in Congress have prevented action on moving the legislation. Congress has a dismal record on dealing with increasing the Federal minimum wage. As the Labor Law Center notes, Congress increased the minimum wage to $5.15 in 1997. It took another 10 years to increase it to $5.85 in June of 2007, then $6.55 in June of 2008 and $7.25 in June of 2009. It has not increased since then.
As noted in the Huffington Post article:
Last year, Democrats in the Senate and the House of Representatives introduced legislation known as the Fair Minimum Wage Act, which would have raised the federal minimum wage to $9.80 per hour after three years and indexed it to inflation. Those bills failed and are expected to be reintroduced in the coming Congress, although the Republican-controlled House is unlikely to pass an increase to the minimum wage.
President Barack Obama, while campaigning in 2008, pledged to hike the minimum wage to $9.50 an hour and index it by the end of 2011, “to make sure that full-time workers can earn a living wage,” as he said on his transition website. Obama ultimately failed on that pledge and hasn’t been vocal on the issue since his initial campaign. As EPI has noted, if the federal minimum wage had kept pace with inflation since its high in the late 1960’s, it would now be above $10 per hour.
Further action can be taken on the state level via both legislative efforts and initiative efforts. For example, as Minnesota Public Radio reports, the new legislative majority in Minnesota has prioritized raising their minimum wage and indexing it to inflation.
State Sen. Chris Eaton, DFL-Brooklyn Center, is sponsoring legislation to increase the minimum wage for large employers by $1.35 an hour to $7.50 an hour, and provide for automatic inflationary increases in the future. “Putting more money in the pockets of minimum wage earners is good for the whole economy,” Eaton said. “The money is going to be spent in local businesses, on job training courses and covering rent.”
The Initiative and Referendum Center lists 24 state’s that have the initiative process. While it is more difficult in some states than others to get on the ballot, there are 15 additional states that could pass state minimum wage initiatives that are indexed to inflation. They are Alaska, Arkansas, California, Idaho, Illinois, Maine, Massachusetts, Michigan, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Utah and Wyoming. A couple of big states like California, Illinois, Massachusetts, and Michigan passing new state minimum wage initiatives indexed to inflation would give a big boost to efforts to enact such legislation in Congress.
Minimum wage legislation indexed to inflation is a progressive issue and could certainly boost turnout of Democratic voters in key states and help elect a more Democratic Congress keyed to helping average citizens rather than boosting corporate profits and concentration of wealth in the hands of a few. This is something to keep in mind regarding the 2014 and 2016 elections where members of the House and Senate are running.
Also as Henry Ford knew when he paid his workers higher wages than other industries, he was providing them with income to buy his cars. People working at or near minimum wages are barely getting by and are not going to put their money in a savings account. They are going to spend it which keeps the money in circulation stimulating the economy. This helps everyone.