California becomes the first state in the nation to increase their state minimum wage to $10/hr. As a result it there are an estimated to benefit 2.4 million workers earning between $8.00-$10.00/hr who will benefit from the wage increase. An additional million more workers currently earning slightly above $10 per hour will probably see adjustment increases. Overall it is expected that the minimum wage increase will generate $3.3 billion in new economic growth within the state.
AB 10 signed by Governor Jerry Brown will raise California's minimum wage in 2 one dollar increments. Effective July 1, 2014 California's minimum wage goes from $8/hr to $9./hr and then January 1, 2016 the state minimum wage increases to $10 per hour.
Maryland, Massachusetts, Illinois and Minnesota are planning similar initiatives to increase their minimum wage. While Alaska, South Dakota, Idaho and New Jersey are considering initiatives to raise their state minimum wage and also adjust the wage based on the cost of living. There are 10 states that now increase their state minimum wage based on the cost of living index.
The US Department of Labor enforces the Federal minimum wage laws which defaults to the higher wage rate that most benefits the worker. The Federal minimum wage is currently set at $7.25/hr which equals an annual full time income of $15,080. Established in 1938 The Federal minimum wage was intended to help pull the country out of the Depression. Congress has voted to increase the Federal minimum only 3 times in 30 years. Had the Federal minimum wage been indexed by the cost of living it would be $10.56/hr. Changing the Federal minimum wage requires Congress to approve. Since it does not appear that the Federal Minimum wage will be raised by Congress several states have taken the challenge by increasing their state minimum wage.
Currently Washington state has the highest minimum wage in the country at $9.19 an hour, followed by Oregon at $8.95 and Vermont at $8.60. Nevada, Connecticut, the District of Columbia and Illinois all have minimum wages of $8.25 an hour. There are 19 states that have passed laws setting their state minimum wage above the Federal minimum of $7.25/hr. A total of 22 states have passed minimum wages that match the Federal minimum wage. There are four state that have minimum wage requirements below the Federal requirement and five states that have no minimum wage required.
The nonpartisan Economic Policy Institute recently reported that raising the Federal minimum wage to $10.10 per hour would boost pay for more than 30 million low wage workers. The National Employment Law Report (NELP) reports that economists agree that stagnant wages are hurting our economy and holding back the recovery.
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