20 States Boost Minimum Wage

NELP reports:

Of the 20 states with wage increases on or before New Year’s Day, three (Arkansas, Nebraska and South Dakota) approved minimum wage increases through ballot measures in the 2014 elections; seven (Connecticut, Hawaii, Maryland, Massachusetts, Rhode Island, Vermont and West Virginia) passed legislation earlier in the year to raise the minimum wage; and nine (Arizona, Colorado, Florida, Missouri, Montana, New Jersey, Ohio, Oregon 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. The remaining state, New York, will increase its wage on December 31, 2014 — one day shy of New Year’s Day — as a result of 2013 legislation that increases the state’s minimum wage in three steps to $9.00 by December 31, 2015.

Also:

In addition, new legislation approved in 2014 will increase minimum wage levels in Delaware ($8.25 on June 1, 2015), Minnesota ($9.50 by 2016), Michigan ($9.25 by 2018) and the District of Columbia ($11.50 by 2016). In California, a 2013 law will increase the state’s minimum wage to $10.00 by 2016.

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The controversial part of the analysis is the benefit to workers who have low pay, versus margins in companies where these low-paid workers are employed. Higher pay squeezes margins, which could cause layoffs and lower taxable corporate profits. NELP only makes the first argument:

Minimum wage increases on or before New Year’s Day will generate $826.8 million in new economic growth as low-paid workers spend their increased earnings on basic necessities like food, gasoline, and housing. The economic boost will increase to at least $1.1 billion later in 2015 once increases in Alaska ($8.75 on February 24), Delaware ($8.25 on June 1), Minnesota ($9.00 on August 1) and Nevada (to be determined) are taken into account.

Those opposed to the hikes have been aggressively lobbying in Washington, according to the Washington Post. In one case, the paper reported on April 30:

“Raising the minimum wage will kill jobs and stifle economic output,” NFIB Manager of Legislative Affairs Ashley Fingarson said earlier this week, as the organization sent a letter to the Senate urging lawmakers to vote against a bill that would raise the minimum hourly rate from $7.25 an hour to $10.10 an hour

Some members of Congress have effectively blocked the legislation.

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It will take well into this year, and careful analysis, to prove if one side or the other is correct about the economic outcome. And the number of Americans involved in the increase may be so great as to make any analysis impossible. However, without reservation, the states that will raise the wage will rise.