Sunday, January 4, 2015

States’ Minimum Wages Rise, Helping Millions of Workers

Fast-food and health care workers, and supporters, demonstrated in Los Angeles on Dec. 4 in a nationwide rally for higher pay.
Robyn Beck / Agence France-Presse — Getty Images

Progressive America Rising via New York Times

Dec 31, 2014 - For some low-wage workers, everyday tasks like spending money for bus fare to get to and from work also involve deciding which bill to pay or delay, or what to give up.

Rita Diaz, 26, who works two low-wage jobs, sometimes walks the three miles home from her job serving chicken at a Popeye’s fast-food restaurant in Roslindale, Mass., when she doesn’t have money for all of her expenses. Her plight is one of many highlighted by labor advocates who have been pushing for higher minimum wage levels.

In January, with an increase in the minimum wage in Massachusetts taking effect — raising hourly pay to $9 from $8 an hour — Ms. Diaz envisions being able to walk less and ride more.

“I need to make a decision to buy clothes, or pay the rent or pay my cellphone bill,” she said. “Now I’ve got to do that decision, but I’m going to have more money for me, too. A little bit of money for me.”

By Thursday, minimum wage increases will go into effect in 20 states, including Massachusetts, as well as in the District of Columbia. A few other states will enact a pay bump later in the year.

All told, 29 states will exceed the federal minimum wage of $7.25 an hour at the beginning of January, according to the National Conference of State Legislatures.

The initial changes will enhance minimum pay by as little as a few pennies to as much as $1.25 an hour, affecting about 3.1 million employees, according to the Economic Policy Institute, a liberal research group.

“That’s going to be unnoticeable, really,” Gary Burtless, an economist at the Brookings Institution, said of some of the smaller changes, like the extra 12 cents an hour in Florida and 15 cents an hour in Missouri. “If you’re talking about an increase of a buck or two bucks, then maybe there’s some kind of noticeable effect.”

Nine states are increasing their minimum wage levels through automatic adjustments for cost-of-living expenses and other economic factors. Increases in the other states occurred through legislative or ballot changes. Over all, the new laws will cover about 60 percent of the nation’s work force, according to the Economic Policy Institute.

“If you’re only making 15 or 16 thousand dollars year, an extra two grand is quite a bit of money,” said David Cooper, an economic analyst at the institute.

The smaller of the automatic increases in nine states will raise wages for about 4 to 7 percent of the lowest-paid workers, according to the institute, while the bigger increases will affect more. Nearly one-fifth of all wage earners in Minnesota will see a bump in pay when the wage floor jumps by $1 later in the year.

About 3.3 million people earn the federal minimum wage or less, according to the United States Bureau of Labor Statistics.

As the wealth gap between the rich and poor has expanded, the battle over wages for some of America’s lowest-paid workers has intensified.

The federal minimum wage has not been increased since 2007. President Obama has proposed raising it to $10.10 an hour, but that effort has stalled in Congress.

Despite the popularity of minimum wage increases in many states, including those dominated by Republicans, and favorable attitudes toward higher minimum pay expressed in many public opinion polls, the federal proposals are unlikely to gain much traction in 2015, especially now that Republicans control the House and the Senate.

The White House says 28 million workers would be affected if the president’s increase were passed into law.

In the last year, as they faced considerable obstacles at the federal level, some labor advocates worked to put measures on the ballot in various states while other measures passed through state legislatures. In November, four states — Alaska, Arkansas, Nebraska and South Dakota — passed initiatives to increase the minimum wage. A few big cities have also raised the minimum.

“I think this issue is not going away until action is taken at the federal level, just because the federal minimum wage is so low compared to where it was historically and what it takes people to get by,” Mr. Cooper, the Economic Policy Institute analyst, said.

Adjusted for inflation, the federal minimum wage in 1968 would equal about $10 today, he said.

Last year, half of the people who received charitable food assistance in the United States, from places like soup kitchens, came from households where at least one person worked, said Jeffrey Buchanan, senior domestic policy adviser at Oxfam America. Mr. Buchanan said that most of those people earned a low or minimum wage.

Business associations have traditionally opposed efforts to raise workers’ pay, saying that employers will be forced to cut jobs and hours.

“The likeliest scenario won’t be layoffs, it’ll be employers on a broad scale finding ways to avoid creating new jobs,” said Jack Mozloom, a spokesman for the National Federation of Independent Business, a trade group. “They simply won’t replace workers who leave or they’ll find ways to automate in order to avoid hiring new people. The jobs will disappear quickly.”

Mr. Burtless, the Brookings economist, contended that new higher wages would “more than offset” the loss of earnings associated with a drop in employment. The new rules will give workers an extra $1.6 billion next year, according to the Economic Policy Institute.

A spokeswoman for Walmart, the nation’s largest employer, said the company could “absorb the costs” of the changes, which she said would not affect its prices or staffing.

A spokeswoman for Target, another top employer, said in an email that she was “not aware of any plans” to raise prices or cut staff.

Come Thursday, at $9.47, Washington State will offer the highest statewide minimum wage, followed by Oregon at $9.25.

Some states have also staggered their minimum wage increases. Massachusetts, where Ms. Diaz works, will raise it to $11 by 2017.

“It’s not going to be a lot, but it’s going to be more than $8 an hour,” she said of the January increase. “It’s going to be more food.”

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