Twenty states are raising their minimum wage rates – some for cents, others for a dollar or more – as part of previously programmed efforts to adjust cost of living gains or to achieve targets such as a minimum payment of $ 15 an hour.
In New Mexico, the minimum wage will increase to $ 10.50, $ 1.50 above the current salary of $ 9. And in California, the rate for employers with 26 workers or more will increase from $ 13 to $ 14 an hour. , the biggest reference in the entire state of the country. In Minnesota, the gain is just 8 cents, at a rate of $ 10.08 an hour for large employers. (Roll down for a complete list of changes).
The federal minimum wage of $ 7.25 an hour has not changed since 2009 and, starting in 2021, 20 U.S. states will continue to have a minimum wage equal to or less than the federal minimum, making it their standard baseline. The value of the federal minimum wage peaked in 1968, when it was $ 1.60, which would be worth about $ 12 in 2020 dollars.
Although some of the new state increases were established years ago, they have an additional significance now, when low-income workers have been hit particularly hard by the coronavirus pandemic.
“We have many low-income service workers who are working during the Covid crisis, many of whom are in jobs with a higher risk of transmission,” said Ken Jacobs, president of the Center for Research and Labor Education at the University of California-Berkeley. “This will be a very welcome boost for them. In addition, many families are now struggling in this crisis.”
Workers’ needs are greatest during an economic crisis because, with so many unemployed people, they have little bargaining power and employers are able to keep wages low, said Ben Zipperer, economist at the Institute for Economic Policy, a progressive think tank. .
Minimum wage workers are typically younger and have jobs predominantly in the leisure and hospitality sector, federal data show. These many-service businesses were shaken during the pandemic, as public health and safety measures closed restaurants, hotels and entertainment venues.
As the pandemic spread, food and housing insecurity increased and income decreased. And it was workers with lower wages who were impacted by the economic consequences.
Commercial interests recede
At the same time, some lawmakers and business organizations have called for a pause in planned increases in the minimum wage, citing the burden on small businesses that are already struggling.
In New York, members of the state Senate Republican Conference urged Governor Andrew Cuomo to stop the increases planned to take effect on Thursday.
“We don’t want our small businesses to make the difficult choice of laying off workers or closing doors because it becomes the last straw during the financial fragility of the pandemic,” said Republican Senate leader Rob Ortt in a statement earlier. from December.
Subsequently, the Cuomo government released a report concluding that the recovery of the state’s labor market “should not be substantially hampered” by increases in the minimum wage and, conversely, the pace and distribution of vaccines are likely to have a much greater effect on the job market.
“New York is gradually implementing the minimum wage over many years, not all at once,” Evercore ISI economist Ernie Tedeschi told CNN Business in an email. “Furthermore, and this is the most important point, the schedule for New York’s minimum wage adjustments has been known for years and companies are planning and expecting increases all the time.”
Starting on Thursday, the state’s minimum hourly wage will increase 70 cents to $ 12.50 an hour. Minimum wages in the suburbs of Long Island and in Westchester County will also increase from $ 13 to $ 14 an hour. (The minimum has already been set at $ 15 in New York City).
Some states will have to wait
In Michigan, the pandemic is likely to hamper efforts to raise the state minimum wage. There, a state law prohibits scheduled increases in the minimum wage when the state’s annual unemployment rate is above 8.5%.
Although the unemployment rate has recently improved in Michigan, it averaged 10.2% from January to October, so the annual average is “highly unlikely” will fall below the 8.5% limit, the state’s Labor Relations Department said in a press release. The state’s minimum wage will be $ 9.65, compared to $ 9.87.
For the 20 states that will increase their minimum wages, the effects are expected to be more positive than negative, said Zipperer of EPI.
“Redistributing money to lower-paid workers is a smart policy because they are going to spend it,” he said. “This will help to decrease consumer demand that our economy is facing now.”
And public support seems to be growing for increases in the minimum wage. On election day, Florida voters approved a measure to raise the state’s minimum wage to $ 15 an hour by 2026 – from $ 8.56 this year. A Public Agenda / USA Today / Ipsos poll released in September showed increases in public support for an increase in the federal minimum wage.
Most of the minimum wage gains occurred at the state, municipal or business level and included companies like Target and Amazon, which offer a $ 15 hourly wage.
President-elect Joe Biden wants to raise the federal minimum wage to $ 15 an hour, but he is unlikely to have obstruction-proof support in the Senate to achieve this. He could, however, raise the minimum wage to $ 15 an hour for federal contractors through an executive order.
