Minimum wage workers deserve a raise. That’s why President Obama has urged Congress for nearly three years to raise the federal minimum wage − stuck at $7.25 per hour since 2009. While the costs for the basics like housing, food and transportation have all gone up, the national minimum wage has not. In the absence of a national raise, states and localities have taken action. Since 2013, 17 states and the District of Columbia have raised their minimum wage rates. Today, a total of 29 states as well as the District of Columbia have a minimum wage higher than $7.25.
Thanks to this momentum, the minimum wage rates in 14 states go up in January. In a dozen of those states – Alaska, Arkansas, California, Connecticut, Hawaii, Massachusetts, Michigan, Nebraska, New York, Rhode Island, Vermont and West Virginia – it will be because of legislative action or voter referenda over the past two years. For workers earning the minimum wage in Colorado and South Dakota, they’ll see a boost in their earnings because of automatic cost of living adjustments tied to inflation. And while their increases will be delayed until the summer, it’s worth noting that workers in Maryland, the District of Columbia and Minnesota will see increases in 2016 owing to legislation enacted in the past two years.
Also going up in January is the federal minimum wage for workers on certain federal contracts. In 2014, President Obama took action to raise the minimum wage where he could and issued an executive order bringing the minimum wage for workers on federal service contracts to $10.10 per hour. At the time, he also guaranteed that the wage would be adjusted annually to keep up with inflation. In January, their minimum wage will see a slight bump to $10.15 per hour. It’s a small increase because inflation was modest over the last year, but every penny counts for an employee putting in the hard work yet still struggling to get by.
While we’ve seen a lot of progress around the county on lifting the wage floor for workers, there’s still work that needs to be done. If the federal minimum wage were raised to $12 per hour by 2020, some 35 million workers overall would benefit – nearly 90 percent adults, and more than half working women. More than 2 million people would be lifted out of poverty. Raising the national minimum wage would be good for families with millions no longer needing food assistance and 23 percent of all children seeing at least one parent getting a raise. And for business owners, a higher minimum wage means reduced turnover costs, higher morale and more productive workers.
This is an issue that is about the dignity of work and our national values. I applaud those public officials and voters across the country who have already taken action to raise their minimum wages. This January, the workers who are seeing a raise are a step closer to getting a fair day’s pay for a fair day’s work.
By Heidi Shierholz (Labor Department’s chief economist)
