At the beginning of the new year, nearly half of the states in the United States and 48 counties have raised their minimum wage standards. Washington state has set the highest minimum wage standard at $16.66 per hour. Some areas in California and New York have a minimum wage standard of $16.50 per hour.
According to an analysis by the Economic Policy Institute, 21 states will increase their minimum wage standards at the beginning of the new year. Additionally, 48 cities and counties will raise their minimum wage standards above their state’s minimum wage standard, primarily located in California, Colorado, and Washington.
The think tank found that this adjustment will benefit 9.2 million workers. It was also discovered that in any of the 48 counties, to maintain a decent standard of living, the hourly wage should not be less than $17.73.
Analyst Martinez Hickey from the think tank stated that currently, about one-third of the workers nationwide earn less than $15 per hour in states. It is projected that by 2027, this proportion will increase to almost half. However, 20 states still lag behind the federal minimum wage, and both the government and private sector need to take action to help these workers overcome their difficulties.
Currently, lawmakers are working to raise the federal minimum wage nationwide to $17 or higher. Nevertheless, some economists have raised concerns that mandating wage increases could harm small businesses and overall employment levels.
The Wall Street Journal is skeptical of the practice of mandated wage increases and warns that the movement led by left-leaning members of Congress to raise the federal minimum wage (currently $7.25 per hour) to $17 has failed to consider local differences, which are best addressed at the state level.
The publication believes that this “economic free lunch” is an unseen impact that will put pressure on many businesses, force them to reduce hours, raise prices, and prevent unskilled workers from finding their first job opportunities.
According to their analysis, “The current minimum wage is $7.25 per hour, but 99% of hourly workers are already earning more than this figure. According to data from the U.S. Bureau of Labor Statistics, only 1.1% of employees earned less than the federal minimum wage in 2023, with 44% of them being under the age of 25. Undoubtedly, many of them will soon earn higher wages.”
In November, Californian voters narrowly rejected Proposition 32, which aimed to increase the minimum wage to $18 per hour by 2026. If passed, this proposition would have made California’s minimum wage the highest in the country.
This marked the first time in nearly 30 years that a proposal to raise the state minimum wage has been rejected by voters in the United States. Opponents argued that government intervention in the market and forcibly raising wages would not effectively improve people’s living standards. Instead, it could lead to adverse consequences such as increasing employer costs, resulting in substantial job cuts, including a higher tendency for employers to use AI to replace workers.