This month will mark eight years since the last time that the federal minimum wage went up. However, some low-income workers across the U.S. have seen their pay increase despite the gridlock in Congress. That’s mostly thanks to state and local governments raising their minimum wages. Currently, 29 states have a minimum wage that is higher than the U.S. federal minimum wage, which continues to be stuck at $7.25-an-hour.
So, why have local governments been able to move on the issue while Congress has not?
“A lot of jurisdictions are more liberal than the United States’ Congress has been in recent years,” said Gary Burtless, a senior economic fellow at the Brookings Institute. “They feel, as wage levels in general have risen and the cost of living has increased, that the lowest paid workers in their states or their jurisdictions deserve pay raises. Also, when voters are given the choice of lifting the local minimum wage, they frequently do so.”
Last November, residents of four states — Arizona, Colorado, Maine and Washington — voted to increase the minimum wage in their states. So far, ten states have used ballot initiatives to raise their minimum wage. Another 19 states — plus the District of Columbia — raised their minimum wage via legislation and constitutional amendments. Just five states have no state minimum wage on the books and so rely on the federal minimum wage. Another 16 states have kept their minimum wage the same as the federal minimum wage.
Source: Economic Policy Institute
It’s not just blue states that have increased their minimum wage, either. During the 2014 midterm elections, Alaska, Arkansas, Nebraska and Dakota — all of which tend to vote Republican — voted in favor of minimum wage increases.
“Popular sentiment favors minimum wage increases more than almost any other policy that the government could pursue that lifts the incomes of low-income working families,” said Burtless.
According to a 2016 HuffPost/YouGov survey, 66 percent of Americans support a $10.10 federal minimum wage, 59 percent support $12 minimum wage and 48 percent support $15 minimum wage.
One reason for all this support is that most Americans believe that if you work full-time, you deserve to earn a decent living. A person working full-time, earning $7.25-an-hour would make $290-a-week before taxes. That’s about $15,080-a-year. The 2017 poverty threshold for a single-person household is $12,060. For a two-person household, it’s $16,240. That means any single parent or anyone with a dependent working full-time, earning the federal minimum wage, is living in poverty.
About 2.15 million U.S. workers earned a wage of $7.25-an-hour or less in 2016. (Why less? Some service employees who receive tips can be paid a tipped minimum wage, which in some states is as low as $2.13.) The majority of these workers are not teenagers. Almost 1.2 million of them are aged 25 and older while another 533,000 are 20 to 24 years old. Just 443,000 of them are teenagers — 16 to 19 years old, according to the Bureau of Labor Statistics.
The last federal minimum wage increase took place in July 2009 thanks to a law unacted under President George W. Bush. President Obama pushed for higher federal minimum wage throughout his two terms with no luck. Bills introduced by Democrats seeking to raise the minimum wage to $10.10-an-hour and then later to $12-an-hour all died in committee. As a result, Obama is only the third president to not increase the minimum wage since it was enacted in 1938. The other two were Gerald Ford and Ronald Reagan.
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Burtless is skeptical about the possibility of implementing a $15 minimum wage across the U.S. considering that there are great variances in cost of living from state to state and even from city to city.
“In the state of Mississippi, the median wage paid to wage earners in the state is $14.22-an-hour, which is obviously not very much,” he explained. “In Massachusetts, the median wage is $22.45-an-hour. So, it wouldn’t be surprising if the voters in Massachusetts think a higher minimum wage makes sense where as those in Mississippi might think well, the federal minimum wage is high enough for us.”
He went on to point out that there are some states where a $15 minimum wage would be higher than the median wage being paid to workers in that state. The three states where the median hourly wage is lower than $15 are: Arkansas ($14.48), Mississippi ($14.22), and West Virginia ($14.79).
“If we raise the minimum wage instantly in Mississippi to $15-an-hour that means more than half the wage earners in the state would see their wages lifted to $15-an-hour,” explained Burtless. “It’s very hard for me to believe that, that wouldn’t do considerable damage to employment prospects for a lot of the least well paid workers in Mississippi. Then the question is: Are they better off with high minimum wage should they find jobs or better off employed but at a lower minimum wage?”
Instead, Burtless suggested that it might be wiser to push for incremental increases that would take minimum wage to $12-an-hour. Big jump in the minimum wage could result in employers reducing hours, which would end up hurting workers, he said.
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