Minimum Wages Rise in 19 States

When President Obama suggested in his 2014 State of the Union address that Congress should increase the federal minimum wage from $7.25 to $10.10 per hour, states were quick to advance the issue themselves. Since then, and with the help of the Fight for $15 campaign, there has been a flurry of activity aimed at raising the minimum wage — whether through legislation or voter-passed initiatives. Even local governments have set their sights on higher minimum wage requirements for local employers, which has set up a battle with some state legislatures. (See our previous coverage of this issue here, here, and here.)

Currently, 29 states and D.C. have minimum wages above the federal minimum wage. So, while minimum wage workers in a large number of states continue to see raises above the federal rate, workers in nearly half the states remain at the federal rate, which was last raised in 2009. Opponents of minimum wage increases, particularly those in the business community, argue that government-mandated wage increases are an ineffective way to address income inequality and force employers into tough decisions to make up for the higher payrolls, such as raising consumer prices, cutting employee hours, postponing hiring, or replacing employees with automation.

Seven States Pass Minimum Wage Increases in 2016

Historically, minimum wage increases have done well during election years. The issue’s popularity with voters explains both why lawmakers tend to pass minimum wage increases during election years and why voters almost always approve minimum wage increases via the ballot box in those years. For example, in 2014 (an election year for most states), 13 states and D.C. raised their minimum wage rates (nine states and D.C. raised them legislatively and four increased them via ballot measure). That trend slowed in 2015, which was not an election year in most states, with only one state (Rhode Island) increasing its minimum wage.

There was a presidential election, 12 gubernatorial races, and 5,923 state legislative seats up for grabs in 2016, which proved to be no exception to the trend that election years breed minimum wage increases. Three major states and D.C. passed legislation to eventually raise their minimum wages to $15 an hour (or nearly so, parts of Oregon will reach $14.75), and four additional states raised their minimum wages via ballot measures.

Oregon

In early March, Oregon Governor Kate Brown (D) signed legislation (OR SB 1532) raising the state’s minimum wage and establishing three different wages for

1. “urban growth boundaries” (high density),
2. “non-urban counties” (medium density), and
3. other suburban jurisdictions (low density),

that will increase to $14.75, $13.50, and $12.50 per hour, respectively, by 2023. Scheduled increases will go into effect on July 1 of each year. Oregon became the first state to vary the state’s minimum wages by region. New York followed Oregon’s lead later in the year.

New York

In early April, New York enacted a significant minimum wage bill, which will gradually raise the state’s minimum wage to $15.00 an hour under different schedules in three state regions:

1. New York City ($11 in 2017);
2. “downstate,” including Nassau, Suffolk, and Westchester counties ($10 in 2017), and
3. “upstate,” the remainder of New York ($9.70 in 2017).

Future annual increases beyond $15 an hour will be indexed to inflation. Small businesses in New York City (defined as a businesses with 10 or fewer employees) will follow their own schedule for annual increases.

California

On the same day that New York enacted its law, California Governor Jerry Brown (D) signed a bill into law (CA SB 3) to increase the state’s minimum wage annually until it reaches $15 per hour in 2022 (unless the increases are temporarily delayed at any point due to certain economic conditions), with subsequent annual increases indexed to inflation. Small businesses (defined as 25 or fewer employees) will have an additional year to phase in each increase.

Arizona

Arizona voters approved Proposition 206, which will gradually raise the minimum wage in Arizona to $12 per hour by 2020, beginning with an increase to $10 in 2017 and followed by increases to $10.50 in 2018 and $11 in 2019. The proposal also increases the minimum for tipped wage earners to $9 per hour in 2020. Additionally, the measure will mandate that employers with more than 15 employees provide their employees with paid sick time. Employees will accrue paid time off at a rate of one hour per every 30 hours worked, not to exceed 40 hours per year (unless an employer chooses to offer that benefit).

The Arizona Chamber of Commerce and Industry and several other business groups have filed a lawsuit attempting to block Proposition 206 from going into effect.

Colorado

Voters in Colorado approved Amendment 70, which will raise the minimum wage to $12 per hour by 2020. The state’s current minimum wage is $8.31 per hour and tied to inflation because of a 2006 ballot measure; the state’s new minimum will be $9.30 in 2017 followed by 90 cent increases annually until 2020.

Maine

Mainers approved Question 4, which will gradually raise the minimum wage from $7.50 to $12 per hour by 2020, beginning with an increase in 2017 to $9 per hour with additional increases of $1 per year until it reaches $12 in 2020. Additionally, the initiative will increase the minimum wage for tipped workers to $5 per hour in 2017. The tipped wage will increase yearly by $1 per hour until it matches the direct wage rate.

Washington

Finally, voters in Washington approved Initiative 1433, which will gradually raise the current statewide minimum wage of $9.47 per hour to $13.50 by 2020. The wage will increase to $11 per hour in 2017, $11.50 in 2018, and $12.00 in 2019. Like in Arizona, the measure will also mandate that employers provide employees with one hour of paid sick leave for every 40 hours worked.

January 1: Minimum Wages Rise in 19 States

This month, 19 states will see their minimum wages rise. Of those 19 states, seven index their minimum wages to rise with inflation, which resulted in incremental increases this year, six states had scheduled increases due to previously passed legislation or ballot measure, and six states raised rates due to laws or ballot measures passed in 2016.

Increases range from a dollar or more in several states — Massachusetts (+$1.00), Maine (+$1.50), Washington (+$1.53), and Arizona (+$1.95) — to only a few cents in states that index their minimum wage to inflation.

Three additional states (Maryland, Nevada, and Oregon) have previously scheduled minimum wage increases set to go into effect on July 1, 2017. So, even if no new minimum wage legislation becomes law this year, minimum wage workers in 22 states can expect a raise at some point in 2017.

What’s Ahead for 2017?

State lawmakers have already prefiled about 20 bills to increase state minimum wages before the 2017 session has even begun. Expect a flood of minimum wage-related bills when most state legislatures are gaveled into session later this month. However, don’t expect the level of minimum wage increases enacted this year to be as high as 2016 (or another election year).