The minimum wage will rise in 21 states in 2015, putting it above the federal pay floor in more than half the USA and highlighting the impact of a national movement to boost the earnings of low-paid workers.
The increases will lift the hourly wages of 2.4 million workers by up to $1 to an average of $8 and a high of $9.15, according to the Economic Policy Institute. The federal hourly minimum is $7.25.
Another 1.9 million workers are expected to benefit from a higher pay scale. The post-Christmas gifts will pump about $1.5 billion into the U.S. economy because low-wage workers tend to spend most of their paychecks, the liberal think tank estimates.
“It’s not going to bring them a life of luxury, but it’s a substantial amount of money for somebody struggling to get by,” says EPI senior economic analyst David Cooper. “They can make payment plans for a car or buy some extra groceries. ”
Four of the states — Alaska, Arkansas, Nebraska and South Dakota — approved ballot initiatives in November to increase the minimum wage.
Eight states — Connecticut, Hawaii, Maryland, Massachusetts, New York, Rhode Island, Vermont and West Virginia — passed legislation the last two years.
Minimum pay will rise more modestly in nine other states as a result of automatic cost-of-living increases. All of the increases will take effect Jan. 1, except in New York, where it will kick in a day earlier.
By early next year, 29 states with 60% of the U.S. work force will have minimum wages higher than the federal government’s, according to EPI and the National Employment Law Project.
A bill, backed by President Obama, to raise the federal minimum to $10.10 an hour is stalled in Congress amid Republican opposition.
Cooper partly attributes the state action to nationwide strikes by fast food workers demanding raises to at least $15 an hour. Data from payroll processor ADP shows that state minimum wage hikes have helped bring low-wage workers faster earnings growth than higher-paid employees this year.
Critics, including the restaurant industry, say they force employers to hire less or cut employees’ hours.
Wal-Mart spokeswoman Brooke Buchanan said the retail giant won’t raise prices because it “can absorb these costs.”
SOURCE: USA Today – Paul Davidson