Minimum wage hike in 3 states boosts income for battered workers
Low-paid workers in the U.S. have particularly felt the economic sting from the coronavirus pandemic since they tend to work in "front-line" jobs, such as in restaurants and stores. But some employees are getting a financial lift as three states and 18 cities and counties around the country move to raise their minimum wages.
Illinois, Nevada and Oregon raised the baseline level of pay starting Wednesday, as did cities including Portland, Oregon, Washington, D.C., Los Angeles and several other California municipalities. The boost could help families that are struggling with the impact of the pandemic-related recession and boost local economies, according to Holly Sklar, CEO of Business for a Fair Minimum Wage.
The increases, which were scheduled before the pandemic shuttered much of the economy in March, aren't without controversy. Some businesses and anti-wage increase groups are now advocating for a halt in minimum wage hikes. Maryland's Chamber of Commerce is calling for a two-year freeze, for example, arguing that businesses need relief while they regain their footing.
"These are modest increases that are part of laws passed to bring wages up gradually over many years, predating the pandemic," said Yannet Lathrop of the National Employment Law Project.
But those who back a minimum wage hike say the increases will help workers and economies alike. "More money in the pockets of workers means more consumer spending at local businesses," Sklar said in a statement.
Paying workers fair wages provides direct and indirect benefits, said Kelly Vlahakis-Hanks, president and CEO of ECOS, which makes environmentally friendly cleaning products, and a member of Business for a Fair Minimum Wage. Her company, which has a factory in Illinois, pays $17 an hour. Turnover is lower, which lowers costs for recruitment and training, she told CBS MoneyWatch.
"When you take care of your team, they take care of the company as well," Vlahakis-Hanks said. On the economy front, it gives our consumers buying power. We need our consumers buying products during the pandemic."
Many states and cities enacted minimum wage hikes in recent years, including Maryland, which had approved phased minimum wage increases that will gradually take its baseline pay to $15 an hour by 2025. Maryland's next hike, to $11.75 an hour, is scheduled for January of next year.
The boosts came after years of lobbying by unions and worker rights groups such as Fight for $15, which argue that the federal minimum wage of $7.25 an hour is far from a living wage. It's been almost 11 years since the federal minimum wage was raised. That reflects "the longest period without a raise since the federal minimum wage was enacted in 1938," Sklar said.
As of today, Illinois is increasing its minimum wage from $9.25 to $10 an hour, while Nevada will increase its minimum wage from $8.25 to $9 for employees without health benefits and $7.25 to $8 for employees with health benefits. Oregon's minimum wage will rise from $11.25 an hour to $12, while Portland's baseline pay will rise from $12.50 an hour to $13.25.
In Los Angeles, the minimum wage for businesses with more than 26 workers increased today to $15, while those with fewer than 25 workers must pay at least $14.25 an hour. Before today's hike, the minimum wage was $14.25 and $13.25 per hour, respectively.
Washington, D.C. is increasing its the minimum wage from $14 to $15 an hour.
