Workers in 20 states will get a wage increase on January 1 when the minimum wage rises, thanks to cost-of-living adjustments and other planned increases. Later in the year, four more states and Washington, D.C. will raise their base salaries, which means that lower-wage workers in nearly half of the nation may see higher salaries next year.
The wage increases come as the federal minimum wage, which has not seen an increase in more than 11 years, remains mired at $ 7.25 an hour – the longest period that base wages have gone without a raise since it began in 1938. Meanwhile, workers are struggling in Across the country amid the economic downturn caused by Coronavirus pandemic, Which continues to spread relentlessly.
A higher minimum wage can help these workers regain their financial standing, especially so-called primary workers such as grocery clerks and home health aides, whose jobs helped keep the economy active during the crisis, yet their earnings are among the lowest. The critics Demands A higher minimum wage can hurt the labor market by reducing job opportunities – but the modern economic situation Research He found no support for this claim. Instead, advocates say the higher minimum wage helps the economy by putting more money in the pockets of workers who tend to spend it on local business and services.
Holly Sklar, CEO of The Business for a Fair Minimum Wage, a network of business owners and organizations that advocates for an idea: higher minimum wages.
“Consumer spending drives our economy, and strengthening the minimum wage is a powerful way to boost the economy,” Sklar added.
Some companies say higher wages pay off in the long run by reducing turnover and creating higher job satisfaction.
“The direct costs of employee turnover are clear – hiring, interviews, and training,” Kelly Flahakis Hanks, chief executive of ECOS, which makes environmental cleaning products, told CBS MoneyWatch. “Indirect costs are less clear, but significant, and I think they have been greatly underestimated.”
She noted that after her company raised its initial wage to $ 17 an hour in 2014, its voluntary sales volume decreased by 50% from 3% to 1.5%. “We have employees who have worked in our company for 20 or even 30 years,” added Flahakis Hanks.
Lost purchasing power
Since the last increase in the federal minimum wage – to $ 7.25 an hour, beginning July 24, 2009 – the cost of living has increased by more than 20%, while the prices of necessities like housing and healthcare have risen faster. This has caused financial pain for many low-wage workers, who are increasingly paying a larger share of their profits towards housing and other expenses.
About half of the renters are “burdened with cost,” which means that they pay more than 30% of their income towards housing. Depending To the Harvard Joint Center for Housing Studies. The study indicated that after paying the rent, people who earn less than $ 15,000 a year have about $ 410 a month left for food, transportation, healthcare, and other necessities.
Sklar noted that the minimum wage “appeared to help us recover from the Great Depression.” It has a dual goal: to alleviate poverty among workers and to increase consumer spending.
Which countries will raise the minimum wage in 2021?
Michigan is expected to maintain the minimum wage at $ 9.65 on Jan.1. Depending To the National Federation of Independent Business, a commercial group. This is because of a law that prohibits wage increases if the state’s annual unemployment rate for the previous calendar year was higher than 8.5%.
The trade group noted that the state’s unemployment rate averaged 10.2% during October, which means it is unlikely to drop below 8.5% before the end of the year. Otherwise, Michigan would have increased the minimum wage to $ 9.87.
Here are the names and new wage rates for countries that raised the minimum wage in 2021:
- Alaska, down to $ 10.34 an hour on Jan.1
- Arizona, down to $ 12.15 an hour on Jan.1
- Arkansas, down to $ 11 an hour on Jan.1
- California, to $ 14 on Jan.1
- Colorado, to $ 12.32 Jan.1
- Connecticut, down to $ 13 Aug.1
- Florida, to $ 8.65 on Jan.1
- Illinois, down to $ 11 January 1
- Min, to $ 12.15
- Maryland, down to $ 11.75 on Jan.1
- Massachusetts, down to $ 13.50 Jan.1
- Minnesota, to $ 10.08 for employers with a total annual income of at least $ 500,000 and $ 8.21 for employers with income below $ 500,000, as of Jan.1
- Missouri, down to $ 10.30 on Jan.1
- Montana, down to $ 8.75, Jan.1
- Nevada, to $ 8.75 or $ 9.75 on July 1, with a higher rate applied for employers who do not provide worker health insurance
- New Jersey, down to $ 12 on Jan.1
- New Mexico, to $ 10.50 January 1
- New York State, to $ 12.50 on Dec 31, 2020, while Long Island and Westchester will increase to $ 14 on Dec 31, 2020
- Ohio, down to $ 8.80 Jan.1
- Oregon, to $ 12 on July 1, though it will rise to $ 13.25 for the Portland area and $ 11.50 in non-metropolitan counties
- South Dakota, down to $ 9.45 on Jan.1
- Vermont, down to $ 11.75 on Jan.1
- Virginia, to $ 9.50 on May 1
- Washington State, to $ 13.69 Jan.1
- Washington, DC will increase the minimum wage of $ 15 an hour in July to offset the change in the cost of living for the previous 12 months.