Minimum wage to go from $7 to $15 this year
Minimum wage: News of an increase in the minimum wage for workers was announced at the start of the year.
Because the federal minimum wage has stood at $7.25 an hour since 2009, workers in more than half of the states have advocated higher pay.
Several states and cities already have set their own minimum wage rates, but most plan to implement them in 2023.
Higher minimum salaries for this year have been declared in 26 states.
The US payroll specialists at Wolters Kluwer Legal & Regulatory said that one more state would join the update in July.
According to the Economics Policy Institute, 23 states, including Washington, DC, began implementing the higher compensation on January 1.
As a result, eight million workers will be impacted.
There will be wage increases ranging from 23 cents to $1.50.
States implementing the minimum wage increase
- Delaware: $10.50 – $11.75
- Illinois: $12 – $13
- Maryland: $12.50 – $13.25
- Massachusetts: $14.25 – $15
- Michigan: $9.87 – $10.10
- Missouri: $11.15 – $12
- Nebraska: $9 – $10.50
- New Jersey: $13 – $14.13 (includes inflation adjustment)
- New York: $13.20 – $15 (in and around the city), $14.20 (upstate New York)
- Rhode Island: $12.25 – $13
- Virginia: $11 – $12
States that will implement the increase later this year
- Connecticut: $14 – $15 (July 1 implementation)
- Florida: $11 – $12 (September)
- Nevada: $9.50 – $10.25 (firms with benefits), $10.50 – $11.25 (firms without benefits)
- Oregon: $13.50 (July 1 implementation)
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Inflation hit a 40-year high, and people were having difficulty keeping up with rising costs, so last summer, a critical choice was made.
Sebastian Martinez Hickey of EPI said:
“The fact that there’s high inflation really just underscores how necessary these minimum wage increases are for workers.”
“Even before the pandemic, there was no country in the United States where you could affordably live as a single adult at $15 an hour.”
The pandemic and the economic recovery made the wealth divide in America painfully clear.
Over the past two years, significant employers’ initiatives to raise the minimum wage have been sparked by poor working conditions and low salaries.
Additionally, the pandemic contributed to a prolonged gap between the supply and demand for labor.
Due to a personnel shortage that affected employers during the majority of the year, the average annual hourly salary increased.
Even when workers in competitive industries learned their new pay was higher than inflation, skyrocketing inflation exceeded most compensation.
Californian economics professor Michael Reich said:
“The story is different because wages have been increasing at the low-end, much faster than inflation and much faster than in middle- or high-wage jobs.”
“And that means that many workers, even in the $7.25 states, are already getting paid above the minimum wage.”
“Even though the minimum wage might go up by 7% in many states and cities, labor costs aren’t going to go up anywhere as much as they have in the past,” Reich added.
“Because they have already gone up. That also means that prices aren’t going to go up at [places like] restaurants.”
Joe Biden, the US president, launched initiatives to boost the federal minimum wage to $15 per hour.
In 2022, he signed an executive order raising the salaries of contractors and employees of the federal government to that amount.
However, Congress would need to approve any significant changes before they could occur in the country.
Although a fee increase was suggested, it wasn’t included in the legislation for the 2021 Covid-19 relief.
Kevin Werner of the Urban Institute, contends:
“As the gap between that and the federal minimum wage increases, it will be interesting to see if that can kind of spur more momentum for more states to increase their wages or try to get more momentum on the federal level.”
According to a September report from the Urban Institute, the $15 per hour pay adjustment would have an inﬂuence on 56 million workers.
As a result of the new minimum wage, the study simulated two scenarios in which no jobs were lost and two scenarios in which job losses were more remarkable.
“Even in our highest job loss scenario, we still found that on average, the average worker was better off, and that poverty declined overall,” said Werner.
“Even though some individual people who lost their jobs may have been worse off, the net effect was still positive.”
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According to Kevin Werner, the bulk of laborers who would be impacted by the $15 minimum wage are older than 25.
The likelihood of relying on the minimum wage is higher for people of color and those living in poverty.
Werner made the point that raising the federal minimum wage would help those in need.
The CEO of Business for a Fair Minimum Wage, Holly Sklar, maintains that raising the minimum wage can also increase consumer demand.
As a result, the local economy will be able to recover.
“Putting needed raises in minimum wage workers’ pockets [is] really the most efficient way you can boost the economy,” said Sklar.
“Those are the people who have to go right back around and spend it.”
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