Pennsylvania could learn a thing or two about how to breathe new life into its economy from 10 states preparing to give their lowest-wage workers a raise in the new year.
The minimum wage will increase in those 10 states — Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island, Vermont, and Washington — beginning January 1. The wage rates will rise between 10 and 35 cents per hour, resulting in an extra $190 to $510 per year for the average directly-affected worker, as the National Employment Law Project (NELP) explains.
Across the 10 states, a total of 995,000 low-paid workers will benefit. This includes approximately 855,000 minimum wage workers who will benefit directly from the raises as well as another 140,000 workers whose wages are also expected to rise. 71% of these low-wage workers are adults over the age of 20, and 69% work 20 hours per week or more.
In all, 19 states (not including Pennsylvania) and the District of Columbia have minimum wage rates above the federal level of $7.25 per hour. This includes the 10 mentioned above, most of which have cost-of-living adjustments built into their states' minimum wage laws.
NELP is urging Congress to bring the national minimum wage more in line with the cost of living today. Legislation sponsored by U.S. Senator Tom Harkin and Representative George Miller would help by raising the federal minimum wage to $9.80 by 2014 and adjusting it annually to keep pace with the cost of living in future years.
Pennsylvania could also get on board with the 19 other states that have raised their state minimum wages. This would be a good move for the state's economy. Raising the minimum wage puts more money in the pockets of low-wage workers who are more likely to spend it on basic expenses, boosting local economies. As NELP observes:
A large body of research shows that raising the minimum wage is an effective way to boost the incomes of low-paid workers without reducing employment. A groundbreaking 1994 study by David Card and Alan Krueger, current chair of the White House Council of Economic Advisers, found that an increase in New Jersey’s minimum wage did not reduce employment among fast-food restaurants. These findings have been confirmed by 15 years of economic research, including a 2010 study published in the Review of Economics and Statistics that analyzed data from more than 500 counties and found that minimum wage increases did not cost jobs. Another recent study published in April 2011 in the journal Industrial Relations found that even during times of high unemployment, minimum wage increases did not lead to job loss.
Additionally, Remapping Debate has an interactive chart showing the gap between the family poverty threshold and the earnings of minimum wage workers over time, going back to 1968. The chart shows that the federal minimum of today is significantly less in real terms than it was four decades ago.
Let's hope that our elected officials fix this and that more minimum wage workers get a raise in 2013.