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Home » Overtime & Minimum Wage Law » States Give Mil­lions of Min­i­mum Wage Work­ers a Raise

States Give Mil­lions of Min­i­mum Wage Work­ers a Raise

January 15, 2020 by Lisa Guerin

Did you get a raise for the New Year? For low-​wage work­ers in any of the 22 states that increased its min­i­mum wage last week, the answer is yes. In fact, the Eco­nomic Pol­icy Insti­tute esti­mates that almost seven mil­lion employ­ees will see their pay increase as a result of 2020 increases in state and local min­i­mum wage rates.

How Min­i­mum Wage Laws Work

Many laws that reg­u­late the work­place are intended to pro­tect employ­ees. These include min­i­mum wage laws, over­time rules, laws pro­vid­ing time off work, and pro­hi­bi­tions against dis­crim­i­na­tion and harass­ment. Under these laws, employ­ees are enti­tled to the most pro­tec­tions avail­able under fed­eral, state, or local law. So, even though the fed­eral min­i­mum wage has been stuck at $7.25 for more than a decade, employ­ees in more than half of the states are enti­tled to a higher state or local min­i­mum wage.

In some places, employ­ees are enti­tled to be paid more than dou­ble the fed­eral min­i­mum wage. USA Today reports that 32 cities and coun­ties will require employ­ers to pay at least $15 an hour in 2020. No state yet requires employ­ers to pay a $15 min­i­mum wage; the cur­rent high­est rate is $13.50 for employ­ees in the state of Washington.

States struc­ture their min­i­mum wage laws in dif­fer­ent ways. Some pro­vide for an annual increase based on infla­tion. Oth­ers pro­vide for a one-​time increase in the min­i­mum wage. Still oth­ers pro­vide a sched­ule of increases over sev­eral years. In the next few years, the min­i­mum wage in a hand­ful of these states—including Cal­i­for­nia, Mass­a­chu­setts, and Connecticut—will hit $15 an hour.

Effects of Rais­ing the Min­i­mum Wage

Crit­ics of increas­ing the min­i­mum wage argue that higher wages will ulti­mately result in lost jobs. If the law forces employ­ers to pay more, they may hire fewer work­ers, reduce work hours, or even lay off employ­ees to make ends meet. The Con­gres­sional Bud­get Office issued a report last year attempt­ing to gauge the effect of increas­ing the fed­eral min­i­mum wage, and esti­mated that an increase to $15 an hour would result in 1.3 mil­lion lost jobs. (The report also found that an increase to $10 an hour would result in vir­tu­ally no job loss.)

How­ever, that same report found that increas­ing the min­i­mum wage would sig­nif­i­cantly boost work­ers’ house­hold income. In fact, the New York Times reports that, because of increases in state and local min­i­mum wages that off­set the low fed­eral min­i­mum, the effec­tive min­i­mum wage rate in the United States is about $12 an hour. This is one rea­son why wages have been grow­ing fastest (as a per­cent­age of earn­ings) for the lowest-​paid work­ers in the last cou­ple of years.

Beyond the hard num­bers, increas­ing the min­i­mum wage may have other ben­e­fi­cial effects. There have been a num­ber of sci­en­tific stud­ies in recent years link­ing increases in the min­i­mum wage to bet­ter health out­comes, includ­ing lower sui­cide rates.

More Infor­ma­tion

Get infor­ma­tion on your state’s cur­rent min­i­mum wage by vis­it­ing Legal Con­sumer’s Wage & Hour Law learn­ing cen­ter.

Filed Under: Overtime & Minimum Wage Law Tagged With: employee, employer, state minimum wage

About Lisa Guerin

Lisa Guerin has covered employment law topics for Legal Consumer since 2014. After getting her law degree from Berkeley Law, she worked in government, public interest, and private practice, specializing in employment law. She was a legal editor and author at Nolo for many years, where she wrote or contributed to more than a dozen books, mostly on employment issues. She volunteers with groups that help shelter and rescue dogs, and she enjoys hiking with her own Very Good Boy in the San Francisco Bay Area.

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