The Fight for a Higher Minimum Wage

August 9, 2017

There has been fierce debate in recent years with regards to raising the minimum wage, around the country. There are forces and arguments on both sides of the issue. Some argue raising the minimum wage will help workers by getting more money in their pockets, help to balance the scales of equality, and improve the economy by giving workers more money to spend. Yet others argue this will increase costs on businesses, slow down economic growth, and lead to a rise in unemployment. Regardless of the arguments and despite Congress’s inaction at the Federal Level, the pendulum has begun to swing in favor of a higher minimum wages nationwide.

Back when still in office, President Barack Obama called on Congress to raise the Federal minimum wage to $10.10. Nothing ever materialized of his request and the minimum wage has remained at $7.25 since the last increase in 2009. However, President Obama did use the power of his office to raise the minimum wage to $10.10 for new federal contracts.

President Obama was not the only person making a push for a higher minimum wage. Outside of the halls of Washington D.C., workers employed at national retailers and restaurants decided to take action. The country witnessed employee strikes and protests, most notably employees who worked at Wal-Mart and major fast food restaurants like McDonalds. In the case of Wal-Mart, the company decided to raise its minimum wage for full-time and part-time employees to $10 per hour in light of the mounting protests, political pressure, and negative publicity. The wage increase affected 1.2 million workers. Target and Costco also raised their hourly wages.

The protests and strikes also materialized through citizens in municipal governments, as major cities in the country began passing ordinances to increase their city’s minimum wage to $15.00. Seattle gained recognition as the case-study when it approved a minimum wage increase in 2014. Since then other cities have followed suit, passing higher minimum wages and/or increasing rates for city workers and contractors such in San Francisco, Chicago, Portland (OR), Pittsburg,  Minneapolis, Los Angeles, St. Louis (MO), Greensboro (NC), Syracuse, Missoula (MT), and Washington D.C.

The increased pressure from workers and cities has resulted in action at the state level. In 2016, California and New York became the first two states to raise their minimum wage. California instituted a $15 per hour phase in by 2022, however, California’s state legislatures did etch in exceptions for small business owners and extra authority to the Governor to reduce the rate of increase due to budgetary issues during the phase-in period. New York too raised its hourly wage rate to $15, but will phase it differently, by geography. New York City would see the raise to $15 first by 2018, then in Nassau, Suffolk, and Westchester Counties by 2021. The rest of the State is scheduled to go to $12.50 by the end of 2020. New York State legislatures do provide a slower rate increase for small businesses providing a longer transitional period and allow state budget officials to monitor regional impacts and determine whether the wage increases should continue or be suspended.

Following California and New York, four other states raised their minimum wages in the 2016 elections. Voters in Arizona, Colorado, Maine, and Washington decided to raise their state’s respective wages. Arizona, Colorado, and Maine will raise their minimum wages to $12 by 2020 and Washington will raise its state minimum wage to $13.50 by 2020 as well.

Other states have already passed legislation raising their minimum wages based on a predetermined schedule. A total of nineteen states saw increases in 2017. Some of these states have paired/indexed their minimum wage increases with inflation, the consumer price index or cost of living such as: Alaska, Arizona, California, Colorado, District of Columbia, Florida, Maine, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, New York, Ohio, Oregon, South Dakota, Vermont, and Washington. These adjustments are subject to legislative modifications and in some states the increase will last till a certain dollar amount is reached and or a certain date.

But what goes up also can come down, and since the pendulum does swing, it was not all unexpected to see a response against the rise of the minimum wage. In response to St. Louis’ minimum wage increase, Missouri’s state politicians passed a preemption bill to undo the city’s minimum wage hike and blocked any other city, county, or municipality from raising the minimum wage that would exceed the State’s own rate.

As more and more people, cities and businesses push and adopt a higher minimum wage, it will be interesting to see whether state legislatures will follow suit or decide to push back with preemption. For now, it seems Missouri may not be a trend setter, rather an exception in the current political wind. We will have to wait and see how far the pendulum swings. Our laboratories of democracy are hard at work.

Image Source: The Nation (Reuters/Mark Blinch)

 

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