Twenty-one states are increasing their minimum wage for the new year with workers from Arizona to Vermont set to see an increase.
As Keith Mestrich, CEO of Amalgamated Bank and a fan of the wage hike noted on Yahoo Finance’s YFi PM, “It’s going to be a really happy holiday for a lot of people around the country.”
Fourteen states have wage increases that are set to go into effect on Jan. 1 or Dec. 31.
Seven more states — Alaska, Florida, Minnesota, Montana, Ohio, South Dakota, and Vermont — have automatic cost-of-living adjustments that will take effect on Jan. 1.
Three more states and the District of Columbia have wage increases scheduled to take effect over the course of 2020.
The federal minimum wage, by contrast, has been fixed at $7.25 an hour since 2009 and workers in 21 states remain at that minimum. Two states — Wyoming and Georgia — have a state minimum wage below the federal level, but workers there are entitled to the federal minimum wage unless their employer is not covered by the federal Fair Labor Standards Act.
A national debate over the minimum wage
Democrats passed a bill this summer in the House of Representatives to raise the federal minimum wage to $15 an hour by 2025. As expected, the bill has not been taken up the Senate.
Nevertheless, a variety of states have passed legislation to gradually raise their state minimum wages. Connecticut will reach a $15 minimum wage by 2023. A few areas, notably New York City and the District of Columbia, are set to have $15-an-hour minimum wages in 2020.
A New York Times analysis of the effective national minimum wage — an average across all federal, state and local minimum wage laws — found a rate of $11.80 an hour in 2019. According to the Times, “this is probably the highest minimum wage in American history,” adjusted for inflation.
The Democratic case to business leaders for higher minimum wages increases boils down to this: it’s not going to be as bad as you think. As Rep. Bobby Scott, who led the effort for the House bill, put it in an interview with Yahoo Finance’s Jessica Smith: “They’ll have to adjust, but they’re adjusting every year anyway.”
Bobby Scott, D-Va. and Speaker of the House Nancy Pelosi, D-Calif. after a news conference on Capitol Hill.
A key argument against raising to $15 is that it hurts the very people it’s trying to help. The National Restaurant Association opposed the House bill and — like many business groups — says their industry knows that “the wage hike is a job killer in their communities.”
The Employment Policies Institute, a fiscally conservative group owned by a public relations specialist for the restaurant industry, adds that “the majority of empirical research shows that a higher minimum wage reduces employment for the least-skilled while having little to no effect on poverty rates.”
Another study by a left-leaning group found that “the weight of that evidence points to little or no employment response to modest increases in the minimum wage.”…