$15-an-Hour Minimum Wage Gaining Steam in 23 US States

Twenty-three U.S. states are now on the verge of implementing a $15-an-hour minimum wage, according to reports.

Historically high inflation growth has been surpassing wage gains over the past year, leaving millions of American workers struggling to pay their bills.

The price of goods is now at a 40-year historical high, while mortgage rates are twice what they were in 2021, as the Federal Reserve increases the borrowing rate to control rising prices.

The Consumer Price Index (CPI) hit a historic high of 9.1 percent in June before slowing to 7.1 percent in November.

Until last spring, annual inflation growth rose at an average of 1 to 2 percent for the most part since 2010, when it started to rise dramatically after the country gradually reopened, as the lockdowns were eased.

Annual private sector wages increased by 5.2 percent in the third quarter, well below the inflation rate, according to the Labor Department’s Employment Cost Index.

At least 21 states and 41 cities and counties are set to raise their minimum wages around New Year’s Day, 2023, according to a Dec. 21 exclusive report in USA TODAY, provided by the National Employment Law Project (NELP), a worker advocacy group.

Massachusetts and Washington will raise their minimum wage to $15 an hour at the beginning of January, joining states like California and most of New York.

Sometime later this year, additional local and state governments will increase their minimum wage, for a total 27 states and 59 cities and counties, according to NELP.

“The movement to raise wages continues to gain momentum,” said Yannet Lathrop, NELP’s senior researcher and policy analyst in the “Raises From Coast To Coast In 2023” report.

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“At least 54 cities, counties, and states will have surpassed a $15 minimum wage for some or all employees by the end of 2023,” said Lathrop.

Other states will be slowly raising their minimum over the next six years so that by 2028, a total of 14 states with about 41 percent of the workforce will be at, or will be on the way towards, $15 an hour, said NELP.

The minimum wage hikes on New Year’s Day will affect 3.4 million workers currently earning base pay, while another 5.4 million will make somewhat more but will benefit from trickle-down effects from within a business, according to data from the Economic Policy Institute, published by USA TODAY.

However, the institute’s figures fail to take into account municipal and county minimum wage increases.

A campaign for an increase in the minimum wage has been growing for years since the federal minimum wage was raised to $7.25 an hour in 2009.

Congressional Republicans have blocked attempts to raise it after small business owners protested that a wage hike would hurt their long-term survival.

About 30 states, which comprise 60 percent of the American workforce, have higher minimum pay than the federal government’s wage floor.

Washington, D.C. maintains the highest minimum wage in the United States, at $16.10 an hour, according to the Department of Labor. 

Wyoming and Georgia both have the lowest wages in the country, at a basic minimum hourly rate of $5.15, as those workers fall exempt under the Federal Fair Labor Standards Act (FLSA) category.

In both states, those who fall under exceptions to FLSA may be paid less than the federal minimum wage.

Meanwhile, many companies, since the pandemic, have raised their entry-level wages to $15, such as Target, Best Buy, Amazon, and Costco.

Most states and localities normally hike their minimum annual wage through a planned series of large incremental increases over a consecutive number of years, while others gradually raise their wages by linking the increases to annual inflation rates.

Due to skyrocketing prices, many of the 11 states and 31 cities and counties enacting inflation-triggered minimum wage hikes on Jan. 1 will start offering significant pay increases.

“It will help workers at least maintain a minimum living standard,” said Lathrop, who noted that the increases would simply allow employees to keep up with rising prices rather than any financial gains.

“It will prevent people from having to make tough decisions,” such as whether to prioritize certain basic necessities, she said.

Still, “$15 is still a very important target rate,” said Lathrop, who called it “a bare minimum baseline.”

Meanwhile, many businesses like restaurants, which employ low-wage workers, are dismayed by the minimum wage hikes, arguing that raising them would only worsen inflation as employers elevate prices to offset higher labor costs.

“An extreme wage mandate makes bad economic sense in any environment. Right now, it’s insane to move ahead with it. Business owners, and small restaurants in particular, will pay the price,” Michael Saltsman, managing director of the Employment Policies Institute, told USA Today,

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By Nick R. Hamilton

Nick has a broad background in journalism, business, and technology. He covers news on cryptocurrency, traditional assets, and economic markets.

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