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Wage increases take effect in 14 states

With federal minimum unchanged for years, several jurisdictions take action

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Gazette staff and wire

CHICAGO — As the United States marks more than six years without an increase in the federal minimum wage of $7.25 an hour, 14 states and several cities are moving forward with their own increases, with many taking effect on New Year’s Day.

California and Massachusetts are highest among the states, both increasing from $9 to $10 an hour, according to an analysis by the National Conference of State Legislatures. At the low end is Arkansas, where the minimum wage is increasing from $7.50 to $8. The smallest increase, a nickel, comes in South Dakota, where the minimum is now $8.55.

The increases come in the wake of a series of “living wage” protests across the country, including a November campaign in which thousands of protesters in 270 cities marched in support of a $15-an-hour minimum wage and union rights for fast food workers. Food service workers make up the largest group of minimum-wage earners, according to the Bureau of Labor Statistics.

With Friday’s increases, the new average minimum wage across the 14 affected states rises from $8.50 an hour to just over $9.

Several cities are going even higher. Seattle is setting a sliding hourly minimum between $10.50 and $13, and Los Angeles and San Francisco are enacting similar increases in July, en route to $15 an hour phased in over six years.

In Iowa, one of the state’s 99 counties — Johnson County — has begun the first of three phases to bring the $7.25 minimum to $10,10 an hour there by 2017. Although some of the county’s smaller communities have opted out, the county’s largest cities including Iowa City and Coralville are letting at least the first phase — a 95-cent increase — take effect.

In July, the Iowa Workforce Development agency said Johnson County did not have the legal authority to enact such a rule, which it said is only in the Legislature’s purview. But in a statement this week, the agency said it does not have the standing to challenge the county’s vote in court.

Backers of an increased wage threshold say a higher minimum helps combat poverty, but opponents worry about the potential impact on employment and profits.

In 2014, a Democratic-backed congressional proposal to increase the federal minimum wage for the first time since 2009 to $10.10 stalled, as have subsequent efforts by President Barack Obama. The non-partisan Congressional Budget Office estimated the proposal would have raised the wages of 16.5 million Americans and lifted 900,000 of them out of poverty but would have cost as many as 1 million jobs.

But Alan Krueger, an economics professor at Princeton University and former chairman of Obama’s Council of Economic Advisers, said a federal minimum wage of up to $12 an hour, phased in over five years or so, “would not have a noticeable effect on employment.”

Some employers may cut jobs in response to a minimum-wage increase, Krueger said, while others may find hikes allow them to fill job vacancies and reduce turnover, lifting employment but lowering profits.

The 14 states where increases took effect Friday are: Alaska, Arkansas, California, Colorado, Connecticut, Hawaii, Massachusetts, Michigan, Nebraska, New York, Rhode Island, South Dakota, Vermont and West Virginia.

Rod Boshart of The Gazette and Reuters contributed to this report.

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