The New Year is off to a fruitful start for millions of Americans.
Some 5.3 million workers will be receiving higher pay starting Jan. 1 as minimum wage increases kick in for the New Year, according to an analysis from the left-leaning think tank Economic Policy Institute. The EPI analyzed data from the Current Population Survey, conducted on a monthly basis by the US Census Bureau.
These increases come as a result of changing polices across the US, including a $ 0.05 inflation adjustment in Alaska and a $ 2-per-hour increase in New York City. It also includes the preliminary effects of ballot measures passed in Missouri and Arkansas, which will increase the minimum wage from $ 7.85 an hour to $ 12 an hour and from $ 8.50 an hour to $ 11 an hour, respectively, by 2021. In addition to Missouri and Arkansas, states including California, Massachusetts, Arizona, Colorado, Washington and Maine are seeing minimum wage increases as the result of past ballot legislation.
“Americans are fed up with an economy that isn’t rewarding hard work and they’re not waiting for politicians to do something about it — they’re acting themselves,” said Jonathan Schleifer, executive director at the Fairness Project, a nonprofit that promotes economically progressive ballot initiatives. “Millions of working families are getting raises because Americans came together to raise the minimum wage.”
Republican lawmakers and many small-business owners argue that raising the minimum wage is ultimately detrimental to low-income workers. They say that increasing the minimum wage will deter them from hiring workers and encourages them to turn to automation instead of employees.
The pay raises outlined by the EPI will contribute to approximately $ 5.4 billion in increased wages over the course of 2019, the EPI analysis showed. The average worker will see an extra $ 90 to $ 1,300 annually, depending on the size of the minimum wage change in their state.
The federal minimum wage has been at $ 7.25 since July 2009. Starting pay for US workers ranged from $ 10 per hour to $ 14 per hour. Raising the minimum wage can have a range of benefits for workers themselves and other issues, advocates say, including decreasing the rates of re-offending for ex-prisoners, improving worker mental health and reducing employee turnover rate.
“For families struggling to get ahead, a minimum wage increase can mean not having to choose between paying rent and putting food on the table,” Schleifer said.
More pushes to increase minimum wage have come as middle-class income remains stagnant in the face of rising inequality, past reports from the EPI have shown. Despite increases in worker productivity, income inequality has soared in the US over the last five decades, according to a report released in 2018 by Keith Ellison, a Democratic congressman for Minnesota. “Instead, this increase in income inequality was almost entirely driven by soaring compensation levels for the top one percent of income earners,” he said.
Proposals to raise the federal minimum wage could be reintroduced after Democrats took back control of the House in the 2018 midterm elections. However, the higher minimum wage movement may not gain much traction. While the House is now majority-Democrat for the first time in nearly a decade, the Republican Senate is likely to block many of their measures, experts say.