What's your state's minimum wage?
Minimum-wage workers got a raise at the start of 2016 in 14 states, and 2 more plus the District of Columbia will hike their pay thresholds during the year.
|District of Columbia||$10.50
Rises to $11.50 on July 1, 2016.
Rises to $8.75 on July 1, 2016.
$7.25 at small businesses. Large-employer rate rises to $9.50 on Aug. 1, 2016.
$7.25 at small retail or service businesses.
$7.25 at small businesses.
$7.25 for workers who receive health benefits.
$7.25 at small businesses.
National Conference of State Legislatures
The federal minimum wage has been stuck at $7.25 an hour for several years, and proposals to raise it have failed to advance. Dissatisfied with the lack of federal action, many states and a few cities and counties have taken on the issue, either through legislative action or at the ballot box. Another wave of state minimum-wage increases ushered in 2016.
Thirty states and the District of Columbia now have minimums above the federal rate. And some communities -- such as Seattle, San Francisco, and Montgomery County, Maryland -- go even higher than their state minimum.
"Addressing the minimum wage seems to be a cyclical issue in which states look at it when the federal government doesn't," says Jeanne Mejeur, a senior researcher with the National Conference of State Legislatures in Denver. "The federal government's last minimum wage increase was in July 2009, but that was a result of a 3-step pay raise that was voted on in mid-2007."
Automatic annual increases in some states
To keep pace with inflation, 15 states and D.C. have plans in place to adjust their minimum wage every year, typically on New Year's Day.
"More states are looking at establishing automatic indexing so that the legislature doesn't need to address the issue again," says Mejeur.
Meanwhile, workers in 21 states are still paid the federal minimum wage of $7.25 because the states either:
- Have established the same minimum wage as the federal government.
- Have a lower rate than the federal minimum wage, so the higher standard applies.
- Have not established their own minimum wage.
Using data from the U.S. Bureau of Labor Statistics, the Pew Research Center concluded that just 4.3% of all workers who are paid by the hour earned the minimum wage or less in 2013.
Why increase the minimum wage?
The federal government sets a minimum wage under a 1938 law called the Fair Labor Standards Act, which states that its goal is to promote "the minimum standard of living necessary for health, efficiency and general well-being of workers." Critics say the current $7.25 federal minimum wage is falling short.
"There's deep frustration and anger among working people that their wages have been stagnant for so long while corporate profits have soared," says Seth Harris, a former acting U.S. secretary of labor and now a distinguished scholar at the Cornell University Industrial & Labor Relations School. "Raising the minimum wage is one of the few mechanisms to directly impact working families."
A Pew Research poll in January 2014 found that 73% of the public favored raising the federal minimum wage to $10.10 an hour.
"There's overwhelming support in this country for Congress to implement an increase in the minimum wage, but Congress has been silently opposed to it," says Harris.
Raises in 'red states' and 'blue states'
Although the highest minimum wages tend to be in "blue states" such as California, Oregon, Massachusetts and Vermont, Harris says it's inaccurate to call this a "blue state" versus "red state" issue.
"Four states where voters overwhelmingly voted to increase the minimum wage -- Alaska, Arkansas, Nebraska and South Dakota -- are what I consider some of the blood-reddest states," he says.
Politics play a role in whether states opt for a one-time increase in the minimum wage or indexing for automatic increases.
"As a general matter, Republican elected officials are against indexing minimum wages because they don't like to see minimum wages increased, but Democrats, who purport to support indexing, actually would rather have regular political fights over this issue since it tends to be a good thing for Democrats to be able to argue that they support working people," says Harris.
"Indexing takes the topic out of political debates, which is actually good for wage-earners," he adds.
The arguments against raising wages
Of course, not everyone agrees that raising the minimum wage is good for the economy.
"Politicians in the states where the minimum wage is being raised just don't realize the negative impact this will have," says Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University. "If you make the cost of employing someone higher, businesses will either have to employ fewer people or cut the hours of their employees."
De Rugy points out that the nonpartisan Congressional Budget Office reported that a federal minimum wage increase to $10.10, as supported by President Barack Obama, would reduce total employment nationwide by about 500,000 workers.
Harris says although it's possible that some businesses would say they couldn't keep all their employees or hire new workers under a higher minimum wage, a raise would give more money to workers likely to spend it.
"An increase would help the economy because 70% of the American economy is built on consumption," he says.