Ten states ushered in the New Year with an increase to their minimum wages. The federal minimum wage has not increased since it was raised to $7.25 an hour in July 2009. At the same time, the cost of living has gone up and the value of that minimum wage has gone down.
According to the National Employment Law Project (NELP), the increases in these 10 states will result in a positive GDP impact of more than $180 million, and will directly or indirectly result in wage increases for nearly a million workers. Based on NELP’s report, 24/7 Wall St. reviewed the 10 states that have raised minimum wages this year.
The minimum wage increases were not uniform across all states. Missouri’s minimum wage rose from the federal minimum of $7.25 an hour by just 10 cents to $7.35 an hour. In most states, the increase was 14 or 15 cents. Rhode Island’s minimum wage rose by 35 cents, more than double any other increase.
While some may believe that the minimum wage primarily affects the earnings of high school students taking summer jobs, in reality the majority of minimum wage positions are held by adults. In Florida, for example, nearly 90% of those workers affected by the state’s 12 cent increase are 20-years of age and older. Of those workers, more than 85% work 20 hours or more per week.
In an interview with 24/7 Wall St., NELP policy analyst Jack Temple explained that in this post-recession era, the status of the minimum wage is more important than it has been in some time. “Growing numbers of adults are relying on minimum wage jobs to make ends meet,” Temple said. “Service sector jobs, restaurant jobs, and retail jobs account for the bulk of job growth, and middle-wage, more unionized jobs are declining as a total share of the U.S. economy.”
Because the recovery has resulted in more Americans relying on lower wages, and since the federal level has not increased in years, Temple explains that some states are looking at the minimum wage as a method of recovery. New York, for example, which is currently tied to the federal level of $7.25 an hour has legislation in play that would see the rate rise to $8.50 an hour. Temple also mentioned that campaigns to increase the minimum wage appear imminent in states like Maryland and Connecticut.
Based on NELP’s release, “10 States to Increase Minimum Wage on New Years Day,” 24/7 Wall St. reviewed each state that raised its minimum wage on January 1, 2013. NELP provided information on the states’ minimum wage increases as well as on the demographics of workers affected by these increases. 24/7 Wall St. also reviewed unemployment and earnings data provided by the Bureau of Labor Statistics (BLS), as well as the Council for Community and Economic Research’s (C2ER) Cost of Living Index.