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January 1, Two Dozen States Hike Minimum Wage: Unmasking the Consequences
New minimum wage increases took effect on Monday in 22 states, boosting wages for an estimated 10 million workers, according to the Economic Policy Institute (EPI). The pay increases have also been adopted by 43 cities and localities and are slated to increase employee wages by a combined $7 billion per year, according to estimates from the EPI and other groups.
At least three of the states — New York, California, and Washington — increased their pay floor to at least $16 per hour. Meanwhile, more than 45 states and jurisdictions increased their minimum wage to at least $15 per hour, according to the National Employment Law Project, amounting to the biggest victory for low-wage workers in decades.
The 22 states that increased their minimum wage effective Jan. 1 are:
- California, which increased hourly pay to $16 per hour;
- Washington state, to $16.28;
- Alaska, to $11.73;
- Hawaii, to $14;
- Montana, to $10.30;
- Arizona, to $14.35;
- Colorado, to $14.42;
- South Dakota, to $11.20;
- Nebraska, to $12;
- Minnesota, to $10.85;
- Missouri, to $12.30;
- Michigan, to $10.33;
- Illinois, to $14;
- Ohio, to $10.45;
- New York, to $15;
- New Jersey, to $15.13;
- Vermont, to $13.67;
- Maine, to $14.15;
- Connecticut, to $15.69;
- Rhode Island, to $14;
- Delaware, to $13.45;
- Maryland, to $15.
The changes come as employees nationwide have struggled to adjust to higher costs due to inflation, which cooled slightly in the latter half of 2023 after rising to a 40-year high in 2022. Consumer prices have also steadily increased since 2020.
Meanwhile, the federal minimum wage has remained unchanged at $7.25 per hour since 2009, prompting new affordability complaints from millions of workers. Proponents of a higher minimum wage have argued the federal minimum wage is far below the required amount for employees to meet the “self-sufficiency standard,” or the estimated income required for a family to meet its basic needs. More than 20 states continue to abide by the federal minimum wage.
Still, the 2024 increases are a major victory for low-wage workers. They also help address inflation and rising consumer costs: Of the 22 states that boosted their minimum wage on Jan. 1, 12 states approved plans that will automatically adjust worker pay for inflation each year.
The minimum wage increases are slated to disproportionately benefit women, who make up more than 57% of employees receiving an increase in pay, as well as black workers, who make up 9% of the wage-earning workforce, and Hispanic workers, who make up 19% of the affected employees, according to a blog post from the EPI late last month.
Almost 1 in 5 workers who will receive a pay boost have incomes below the poverty level, while roughly half of workers, 47%, have incomes below twice the poverty line. More than 25% of workers affected are parents.
Despite the progress, however, advocates are pushing for more to be done. “Despite continued progress by many states across the country to increase their wage floors, there are still 17.6 million workers earning less than $15 an hour,” an assistant EPI researcher, Sebastian Martinez Hickey, said in the blog post.
Why It Matters (op-ed)
The recent minimum wage increases in 22 states may appear to be a victory for low-wage workers, but the unintended consequences of these policies will ultimately harm the very people they aim to help. Raising the minimum wage can lead to job loss, as businesses struggle to absorb the increased labor costs.
Furthermore, higher wages may incentivize employers to automate jobs, eliminating opportunities for entry-level workers. Instead of artificially inflating wages, policymakers should focus on fostering economic growth and job creation, which will naturally raise wages and create more opportunities for all Americans.
As our loyal readers, we encourage you to share your thoughts and opinions on this issue. Let your voice be heard and join the discussion below.
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Steve
January 6, 2024 at 7:05 am
In the 80’s when I was working, minimum wage was $3.50. I took jobs but (never a Fast Food worker) sometimes to make ends meet just until I landed a job in my profession. It was entry level for youngsters with no work experience to get worker experience or women to help the family with a little extra income. It was never expected or meant to be a wage to live on! (But then you could afford “Fast Food”, it was not equivalent or meant to be a restaurant, gourmet meal!
PEGGY FACKRELL
January 6, 2024 at 11:38 am
You are correct Steve. All they have done is to cause everyody to have to pay more for everything. When employers have to pay more they raise prices to cover it. Give it a year or two and they will be raising the minimum wage when the workers now have to pay more for evrything and eat up their raises. It is nothing more than a vicious cycle, always has been.
Tom
January 6, 2024 at 1:43 pm
Every time the minimum wage is increased, the money seniors on fixed incomes is devalued.
The government needs to stay out of this. With in a year of the Biden administration taking office fuel prices raised $2 a gallon because of policies they inflicted on the US citizens. That in itself ruined any wage hikes government proposed. Not to mention the rise in costs of the products those employees produced.
What ever happened to “if you want more money work harder, learn more and get a better job”. Instead of having the government paying you more for doing the same thing you did 15 minutes ago.
The auto unions scored a large wage increase this year. That was good for them. But what it really means is that EVERYONE that buys a new car will pay 500 to a 1000 dollars more from now on.
Government, inflation and lazy people are the problem. When we all get working, church’s and community organizations can help the needy and move them toward a productive life.
bruce hall
January 11, 2024 at 12:17 pm
The purpose of the minimum wage was to stabilize the post-depression economy and protect the workers in the labor force. The minimum wage was designed to create a minimum standard of living to protect the health and well-being of employees.
you seem to not know what your talking about.
Roger E Cook
January 6, 2024 at 9:40 am
The worker never gets ahead. Business owners will always get what they expect to receive. When the employee receives a raise, cost of insurance goes up the same amount of the raise. The employee actually loses. Prices go up so the owner will get the profit expected. It is a vicious circle. The employee never wins. The employee is deceived in thinking they got a raise. I say it again. The cost of insurance goes up along with prices going up and the employee loses.
Wyatt
January 6, 2024 at 10:49 am
Something the article failed to mention, Governor Newsom signed two union-backed bills that will boost fast-food and health care workers’ minimum wages. California-based fast-food workers for chains with 60 or more locations around the nation will earn at least $20 an hour beginning in April, $4 higher than the overall state minimum wage of $16 that will be effective Jan. 1, 2024. Something else that the article misses, and a lot of folks don’t think about, this will just continue to cause spiraling inflation, as workers already earning $20 will want $25, those already earning $25 will want $30, etc., until a fast food burger will cost $20 in the near future, as well as just about everything else.
Mary B
January 6, 2024 at 11:22 am
How many of these states are run by Democrats? High wages will also translate into cost increase and retail price increases.
Deacon
February 19, 2024 at 9:25 am
Yup. The WaWa ( a convenience store) in Delaware is advertising $15 an hour as the starting wage. And yes, the governor is a democrat.
Maria
January 6, 2024 at 11:58 am
The only winner in the approved minimum wage increase is the government who will collect more taxes to shed it on the lazy, illegals and “humanitarian assistance” to countries in the world who hate us. However, everything from food to energy will continue to increase never to catch up to higher wages. And, service will continue to deteriorate and unemployment will increase as companies will be forced to lay off employees to cover cost of operation.
Alana
January 6, 2024 at 12:04 pm
I agree with the above comments. Minimum wage was never meant to be a living wage in most cases, mostly part time jobs, fast food, etc. This increase only affects minimum wage jobs, and provides false information to Biden’s trope “wage increase of 4.7%”, only minimum wage is truly affected and most of these jobs will now go away. Inflation is still killing everybody!
RobL
January 6, 2024 at 12:44 pm
Great. Wages have increased to the highest point ever. Surely that will mean those earning the higher wages will be able to now fully support themselves, buy food, clothing, necessities, pay their rent and taxes and on and on.
It won’t. Their wages now act as a prohibition for companies to hire them. Automation, and service cut backs have already begun. Will these people be able to afford to spend 5% of their weekly income on a meal at McDonald’s, where in some locations the price of a Big-Mac meal is at $18.00? Nope. The wage-price spiral will keep those for whom the it was intended that the additional wages would improve their lot, are now priced out of even the low-end consumer purchases. Democrat government policies are all about ‘feeling good’, not ‘making good’.
Michael Ernest, Sr.
January 6, 2024 at 2:20 pm
What about the people already making the minimum wage because their labor was valued more than the previous MW? If they don’t get a commensurate wage increase, their labor would be effectively devalued the government entities pushing the new minimum wage.
Folks this is called the “cascade effect” that goes up the wage ladder. So in effect, the employer is faced with more labor costs than just the increase to new minimum wage workers. Higher Medicare, SS taxes facing the employers. Highly doubtful employers are going to eat those increased labor costs without some consequence to maintain their profit goals. Guess who makes out like gangbusters- the governments federal, state and local with increased income tax revenues so they can spend more.
Patriot_USA
January 6, 2024 at 9:09 pm
The other cascade effect, as the minimum wages goes up proportionally higher, the consumer prices on all products will jump higher meeting those prices. Thus buying that fast food meal is now twice the amount it was before! Buying those carton eggs at store 60% more than in past and so on. The consumer, AKA worker still loses out. The corporations on down will never take the losses, it a trickle affect that goes down hill right back the the the low wage workers.