Group of Economists Urge Federal Action on Minimum Wage
Last week, a group of economists, through the Economic Policy Institute, released a letter urging the president and congressional leadership to raise the minimum wage. The federal minimum wage is currently $7.25 and hasn't been revised since 2009. The letter states: “July will mark five years since the federal minimum wage was last raised. We urge you to act now and enact a three-step raise of 95 cents a year for three years—which would mean a minimum wage of $10.10 by 2016—and then index it to protect against inflation.”
Raising the minimum wage is a big topic this year for both state and federal legislators, but the issue remains controversial.
Proponents of raising state minimum wages argue that while the federal rate has remained stagnant—it hasn’t increased since 2009—the costs for housing, food, utilities and health care have continued to climb. This leaves those earning minimum wage with less money to afford the basics, which in turn puts downward pressure on the demand for goods and services.
Opponents warn that raising the wage now would have a negative impact on businesses—especially during anemic economic times—and that a minimum wage hike actually hurts those that it intends to help by forcing employers to cut jobs or hours at the low end of the pay scale.
State Minimum Wage Stats
- Currently, 21 states have a minimum wage set higher than the federal rate, ranging from a low of $7.40 per hour in Michigan and $7.50 in Maine, Missouri and New Mexico to a high of $9.32 per hour in Washington state.
- As of January 1, 2014, the minimum wage went up in 13 states over 2013 rates—Arizona, Colorado, Connecticut, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont and Washington.
- Increases ranged from $0.10 in Arizona, Montana and Ohio, to $1.00 in California and New Jersey.
- For nine states, the increased minimum wage is because the rate is linked to inflation. In four states—Connecticut, New Jersey, New York and Rhode Island—the increase is due to legislative action.
- In addition to these 13 states, in California the minimum wage will increase from $8.00 an hour to $9.00 an hour on July 1, 2014. In New York, the wage is scheduled to increase again, to $8.75 per hour, on December 31, 2014.