20 States Ring in New Year With Minimum Wage Increase

Twenty states will begin 2015 with an increase in the minimum wage. New York took the lead Wednesday. On Thursday, the first day of the New Year, several more states including Alaska, Arizona, Arkansas, Colorado, Florida, Hawaii, Maryland, Massachusetts, Missouri, Montana, Nebraska, New Jersey, Ohio, Rhode Island, South Dakota, Vermont, Washington and West Virginia will also increase their minimum wage.

In the 2014 midterm elections, many voters supported a higher minimum wage even though some economists warned of unintended consequences.

President Obama has also pushed for increases of the minimum wage, arguing that it will help workers and the economy.

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As noted in a White House year-end report, “Over the past year, President Obama successfully rallied support for raising the minimum wage in states and cities across the country, while signing an executive order to raise the minimum wage for workers on new federal contracts.”

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Connecticut Lt. Governor Nancy Wyman argued when her state passed a new minimum wage, “This legislation will help 125,000 hardworking Connecticut women who earn at or just above the minimum wage put food on the table, pay rent, and create a better life for their families.”

Connecticut’s minimum wage rises to $9.15 Thursday before gradually going up to $10.10 by 2017.

Oregon’s Labor and Industries Commissioner Brad Avakian claimed in a statement, “Oregon’s minimum wage helps workers keep pace with the rising cost of goods while boosting the purchasing power of consumers around the state.”

Oregon will be increasing its minimum wage from $9.10 an hour to $9.25.

“With this increase in Oregon’s wage floor, more than 140,000 Oregonians will have more money to make ends meet – and more money to spend at local businesses. That’s good for everyone,” Avakian concluded.

Michael Saltsman, research director for the Employment Policies Institute (EPI), countered that minimum wage increases don’t do much to help the poor and can often hurt employment prospects.

“I do think with all these states doing it, you will see new evidence of employers taking action by reducing employment,” Saltsman told The Daily Caller News Foundation. “The upside is it will create a lot of evidence for economist to study.”

Saltsman said employers with low profit margin businesses, like grocery stores, will have to take drastic actions to compensate for the higher cost of employees. This will likely include cutting the number of employees they have and cutting hours.

The National Bureau of Economic Research recently released a report which found that the 40 percent federal minimum wage increase between 2007 and 2009 caused a steep drop in employment.

The study also showed that lower-skilled workers saw their average income fall by roughly $100 in the year after the wage increase took effect. The researchers said it was a direct consequence of lost job opportunities.


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