Twenty states, plus the District of Columbia, are set to increase their minimum wages in 2015, according to the Economic Policy Institute (EPI). Although the increase is routine for nine of these states (meaning their minimum wages are indexed to inflation and therefore increase anyway), the increase will benefit more than 3 million workers across the nation.
Some states are only increasing their minimum wages by 12 to 15 cents, but something is better than nothing at all. For instance, Florida’s minimum wage is going from $7.93 to $8.05, and that’s it. Others, like South Dakota, are bringing theirs up by more than $1 per hour. In Minnesota, more than a fifth of their workforce will see a raise as they increase their minimum wage to $9 per hour. Washington State’s wage will be the highest in the country, at $9.47 per hour.
Overall, as of Jan. 1, 2015, more than half the states will have a minimum wage higher than the federal minimum wage of $7.25 an hour. And with a new Republican-controlled Congress, it’s not likely that the federal minimum will go up at all anytime soon, let alone to Obama’s desired $10.10 an hour.
EPI reports that this represents a $1.6 billion increase in wages just for 2015. For those that claim raising the minimum wage kills jobs, recent analyses on states that have already raised their wages suggest otherwise. Also, according to CBS, it could mean $838 million in terms of economic growth as workers have more money to spend.
An important fact about a consumer economy is that it’s based on how much buying power people have. As their real wages decrease, so does their spending, which results in a drag on the economy. The so-called “job creators” won’t create jobs without demand for their products and services, because nobody hires workers they don’t need. That’s just bad business. When demand is down, companies don’t need as many workers, and they don’t have any reason to give higher pay to the workers they do have because many of those workers will be doing the same work — or even less.
Our economy’s job creators are the consumers, not the wealthy.
NBC News reported on a survey of 500 American millionaires, which gauged how they feel about our wealth and income inequality problem. A surprising 51 percent of them feel that inequality is a huge problem here. Nearly two-thirds support both raising the minimum wage and raising taxes on themselves.
These are the same people who believe that they were successful due to hard work, and think that anybody can make it if they just work hard enough. But they also believe in equality of opportunity, and believe that equality of opportunity doesn’t exist here due to various factors. Equality of opportunity is very different from equality of outcome, which is what Republicans and some of the super-rich believe liberals advocate for (we don’t; we advocate for equality of opportunity).
The wealthy also believe that they have an advantage when it comes to opportunity, such as access to better education. Only six percent actually believe that the poor are poor because they don’t work as hard as the rich do.
Even a 12 cent increase is something, even though it’s not much more than a token. Since the federal government is stalled on raising the minimum to the $10.10 that President Obama wants, and isn’t likely to address it anytime soon, states are taking matters into their own hands. Baby steps are better than no steps at all.