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Blue state minimum wages inch upward, widening gap with South

Chris Marr, Bloomberg News on

Published in News & Features

But a new standard could be emerging among Democratic state policymakers at $18 per hour or higher.

Hawaii would raise its wage floor to $18 by 2028 under legislation awaiting the signature of Gov. David Ige, a Democrat, and a ballot proposal in California would ask voters to approve an increase to $18 there by 2025. The organizers of the California ballot proposal said earlier this month they’ve collected more than enough signatures to get it on the November ballot, and they’re awaiting verification by state and local officials.

Recently introduced legislation in New York also would boost the state’s minimum wages — which vary by geographic region — by indexing them to inflation, potentially pushing New York City’s minimum above $20 by 2025, according to the bill’s supporters.

“I think what Hawaii is doing is a good signal for the direction a lot of the bluer states are going to take,” Cooper said.

Aside from the effect of new legislation and ballot initiatives, 18 states plus D.C. already have laws calling for automatic annual increases based on inflation. Among those is Washington, where the current minimum of $14.49 is likely to surpass $15 next year considering the high inflation levels of 2021 and 2022 thus far.

While the higher minimum wages have been enacted mostly by Democratic-majority state legislatures, that isn’t always the case. In Republican-led Florida, voters in 2020 approved a ballot measure to gradually raise the Sunshine State’s minimum wage to $15. In Arkansas, Arizona, and Missouri — all states where the GOP controls the state legislature and governor’s office—voters have raised the wage floor through ballot initiatives, although not going as far as $15 an hour.

Low mandates down south

Lawmakers in much of the South remain reluctant to raise minimum wages above the federal floor — with Alabama, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Texas all holding steady at $7.25 an hour.

 

Regional differences in living expenses partially offset the gap in minimum wages, Goodrich said.

“Maybe they don’t make as much in Atlanta as they could make in New York City, but obviously the cost of living is much lower in Atlanta,” he said.

The gap among states extends to other areas of worker protections, said Kristen Harknett, a professor at the University of California, San Francisco, who is also involved in research for Harvard’s Shift Project and the EPI wage tracker.

“Wages are not unique. We have a patchwork generally in this country,” she said, pointing to other policies that vary by city and state such as paid sick leave and employee scheduling laws. “There are a lot of holes in the labor law at the federal level that some localities have attempted to fill.”

Market-driven wage increases have boosted some hourly workers. But headline-grabbing announcements from companies such as Walmart and Target have overshadowed the fact that many other service-sector employers haven’t followed suit with higher starting pay, Harknett said.

Just over half of hourly workers at 66 major retail and food-service companies make less than $15 an hour, and a quarter of them make less than $12 an hour, according to Shift Project data.

“You can get a very skewed perspective if you’re just focusing on the announcements by a large company or a handful of large companies,” Harknett said. “What this misses is all the others that have not made similar changes.”

©2022 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

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