Tomorrow voters will choose the next president, but the election could see progress on the minimum wage front, too.
Mellody: I am. As you know, the last few years have seen an increased focus on the minimum hourly wage in places around the country. From the “fight for 15” campaign among fast food and other service workers, to President Obama’s endorsement of a federal minimum wage of $12, up from $7.25 per hour. And is some places efforts have already been successful. But this year, the push for a higher minimum wage could take a significant step forward if voters in a few states decide to raise it through referendums.
The federal minimum wage is $7.25. What states have higher minimums than that?
A majority of states have minimum wages above the federal level, but just three states – California, New York and Oregon – have enacted policies that will raise their state minimum wages to $12 an hour or more in the coming years. And all three of these states have Democratic governors and Democratic state legislatures. But this year – tomorrow – voters in a group of more varied states will decide whether or not to raise the minimum wage at the ballot box, rather than have policies passed through the state legislature.
Where is this happening, and why is it important?
We will see these votes happen in four states. Voters in Arizona, Colorado, Maine and Washington are being asked to approve ballot questions seeking to raise the pay floor. If it happens, as many expect it will, it would more than double the number of states that have created pathways to a $12 minimum wage, from three to seven.
On top of that, one of the most important things about these votes is that they are putting the question to voters rather than relying on legislative bodies. This makes a big difference, as it takes the question away from more partisan political environments, directly to the people. And when asked whether they support a higher minimum wage, a majority of Americans do.
What are the economics of minimum wage hikes?
Those in opposition to minimum wage hikes contend they lead to job losses, higher prices, and hurt smaller businesses who have low profit margins already. Supporters of increases in the wage floor argue that increasing pay for minimum wage workers reduces income inequality and assure that full-time workers with families don’t live in poverty.
But I think the one statistic that is most clear is this: adjusted for inflation, a $12-an-hour minimum wage simply brings the minimum wage back in line with its peak relative to the median wage touched in the late 1960s. It is often overlooked that the federal minimum wage, and most state minimum wage rates, are not indexed to inflation. This means that even as cost of living rises, minimum wage workers have been left behind.
What would a minimum wage rise mean for workers?
This is where the numbers are eye-popping, tom. According to the Economic Policy Institute, if the entire country raised its minimum wage to $12 by 2020 and indexed it to inflation after, wages would rise for 35.1 million workers – more than one in four U.S. workers. Over the phase-in period, those workers impacted would receive nearly $80 billion in increased wages, and when the increase is fully implemented, the average affected worker would earn roughly $2,300 more each year.
And when you look at those who would be impacted, you see that the demographics are a broad spectrum. The average age of affected workers is 36 years old. A larger share of affected workers are 55 and older (15.3 percent) than are teens (10.7 percent). About two-thirds of affected workers are 25 years old or older. The majority of affected workers (55.9 percent) are women. And workers of color would benefit disproportionately, with more than one-third of Black and Hispanic workers receiving a raise.