13 states raising pay for minimum-wage workers

Paul Davidson | USA TODAY

The retail-worker strikes that swept the nation in 2013 did not move Congress to raise the minimum wage, but a growing number of states are taking action.

The minimum wage will rise in 13 states this week, and as many as 11 states and Washington, D.C., are expected to consider increases in 2014, according to the National Employment Law Project. Approval is likely in more than half of the 11, says NELP policy analyst Jack Temple.

The trend reflects growing concerns about the disproportionate spread of low-wage jobs in the U.S. economy, creating millions of financially strained workers and putting too little money in consumers' pockets to spur faster economic growth.

On Jan. 1, state minimum wages will be higher than the federal requirement of $7.25 an hour in 21 states, up from 18 two years ago. Temple expects another nine states to drift above the federal minimum by the end of 2014, marking the first time minimum pay in most states will be above the federal level.

"2014 is poised to be a turning point," Temple says. "States are seeing the unemployment rate is going down but job growth is disproportionately concentrated in low-wage industries. (They're) frustrated that Congress is dragging its feet."

Connecticut, New York, New Jersey and Rhode Island legislatures voted to raise the minimum hourly wage by as much as $1, to $8 to $8.70, by Wednesday. In California, a $1 increase to $9 is scheduled July 1. Smaller automatic increases tied to inflation will take effect in nine other states: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington.

Meanwhile, states such as Massachusetts, New Hampshire, Maryland, Minnesota and South Dakota plan to weigh minimum-wage hikes next year through legislation or ballot initiatives.

In Minnesota, the state House and Senate have each passed bills to raise the minimum wage and plan to iron out their differences early next year after failing to approve similar measures the past two decades.

"You're coming out of a deep recession, and people are landing jobs, but they're low-paid," says state Rep. Ryan Winkler, sponsor of the House bill.

The legislative movement has been partly fueled by walkouts this year in at least 100 cities by fast-food workers who are calling for $15-an-hour pay and the right to form unions. Wal-Mart workers have staged similar protests.

While the demonstrations were not explicitly intended to prompt minimum pay increases, they've made the issue "more urgent," Temple says.

The Bureau of Labor Statistics estimates that 3.6 million hourly paid workers received wages at or below the federal minimum in 2012 — almost 5% of all employees on hourly pay schedules.

President Obama recently said he supports legislation in Congress that would lift the federal minimum wage to $10.10 an hour in three steps over two years and then index it to inflation. But the measure faces an uphill climb in Congress.

Proponents of minimum-wage hikes note that low-wage jobs have dominated payroll growth in the 4-year-old recovery, and increases over the past four decades have not kept pace with inflation.

Opponents say the increases raise employer expenses and will lead to layoffs. "If your costs are going up and you can't raise prices, you have to find a way to produce the same product at a lower cost," says Michael Saltsman, a research fellow at the Employment Policies Institute.

Where minimum wage is going up

On Jan. 1, the minimum wage in 13 states will increase to these amounts.

State New minimum wage Arizona $7.90 Colorado $8.00 Connecticut $8.70 Florida $7.93 Missouri $7.50 Montana $7.90 New Jersey $8.25 New York $8.00 Ohio $7.95 Oregon $9.10 Rhode Island $8.00 Vermont $8.73 Washington $9.32

Source: Society for Human Resource Management