10 States To Increase Minimum Wage On New Year’s Day


— by Keystone Research Center

HARRISBURG, PA – The minimum wage will increase in 10 states on Jan. 1, modestly boosting the incomes of nearly 1 million low-paid workers in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island, Vermont, and Washington.

The minimum wage rates in those states will rise between 10 and 35 cents per hour, resulting in an extra $190 to $510 per year for the average directly-affected worker. Rhode Island’s minimum wage will rise as a result of a law signed by Gov. Lincoln Chafee in June; the remaining nine states will raise their minimum wages in accordance with state laws requiring automatic annual adjustments to keep pace with the rising cost of living.

More after the jump.

Pennsylvania minimum-wage workers haven’t seen a meaningful increase since 2007, during which time the buying power of the minimum wage has fallen 10%, said Dr. Stephen Herzenberg, an economist with the Keystone Research Center. A minimum wage increase that would boost consumer spending is especially needed because of Pennsylvania’s recent lagging job-growth performance. Pennsylvania also needs a minimum-wage hike because it is among the states with the fast-growing income inequality.

Herzenberg also recommended that the state’s minimum wage be set to increase automatically each year to offset the impact of inflation, as Pennsylvania legislator salaries already do.

In the 10 states with minimum wage increases already on the books, the hikes will boost consumer spending, hence GDP, by over $183 million, according to an analysis by the Economic Policy Institute. While weak consumer demand continues to hold back business expansion, raising the minimum wage puts more money in the pockets of low-wage workers who often have no choice but to immediately spend their increased earnings on basic expenses.

We need policies that make sure workers earn wages that will at the very least support their basic needs, said Christine Owens, executive director of the National Employment Law Project. But earning an income that meets basic needs shouldn’t depend on the state where a working family lives. We need to raise and index the federal minimum wage to help all of America’s workers.

The 10 state-level minimum wage increases scheduled for Jan. 1 will benefit a total of 995,000 low-paid workers: approximately 855,000 workers will be directly affected as the new minimum wage rates will exceed their current hourly pay, while another 140,000 workers will receive an indirect raise as pay scales are adjusted upward to reflect the new minimum wage, according to the Economic Policy Institute. Seventy-one percent of these low-wage workers are adults over the age of 20, and 69 percent work 20 hours per week or more.

As of Jan. 1, 2013, 19 states plus the District of Columbia will have minimum wage rates above the federal level of $7.25 per hour, which translates to just over $15,000 per year for a full-time minimum wage earner. Ten states also adjust their minimum wages annually to keep pace with the rising cost of living – a key policy reform known as “indexing” – to ensure that real wages for the lowest-paid workers do not fall even further behind: these states include Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont, and Washington. Nevada has not scheduled a cost-of-living adjustment to take effect this year.

Because the federal minimum wage is not indexed to rise automatically with inflation, its real value erodes every year unless Congress approves an increase. Without further action from Congress, the current federal minimum wage of $7.25 per hour will lose nearly 20 percent of its real value over the next 10 years and have the purchasing power of only $5.99 in today’s dollars, according to a new data brief by the National Employment Law Project. The federal minimum wage would be $10.58 today if it had kept pace with the rising cost of living since its purchasing power peaked in 1968.


Rhode Island is this year’s greatest minimum wage raiser

The Fair Minimum Wage Act of 2012, introduced in July by U.S. Senator Tom Harkin and Representative George Miller, would help recover much of this lost value by raising the federal minimum wage to $9.80 by 2014 and adjusting it annually to keep pace with the cost of living in subsequent years. The Fair Minimum Wage Act would also raise the minimum wage for tipped workers from its current rate of just $2.13 per hour, where it has been frozen since 1991, to $6.85 over five years. Thereafter, it would be fixed at 70 percent of the full minimum wage.

A large body of research shows that raising the minimum wage is an effective way to boost the incomes of low-paid workers without reducing employment. A groundbreaking 1994 study by David Card and Alan Krueger, current chair of the White House Council of Economic Advisers, found that an increase in New Jersey’s minimum wage did not reduce employment among fast-food restaurants. These findings have been confirmed by 15 years of economic research, including a 2010 study published in the Review of Economics and Statistics that analyzed data from more than 500 counties and found that minimum wage increases did not cost jobs. Another recent study published in April 2011 in the journal Industrial Relations found that even during times of high unemployment, minimum wage increases did not lead to job loss.

A recent report by the National Employment Law Project found that 66 percent of low-wage employees work for large companies, not small businesses, and that more than 70 percent of the biggest low-wage employers have fully recovered from the recession and are enjoying strong profits. An August NELP study showed that while the majority of jobs lost during the recession were in middle-wage occupations, 58 percent of those created in the post-recession recovery have been low-wage occupations. That shift towards low-wage jobs is a 30-year trend that is only accelerating, according to a recent report by the Center for Economic and Policy Research.

Why Not Replace Texas With Puerto Rico And Make Everyone Happy?

Last week on election day, Puerto Ricans were asked their preference for the future of their island, currently an unincorporated territory of the United States. A large majority 809,000 voted for statehood, while 73,000 voted for independence and 441,000 voted for sovereign free association. Becoming a state would require approval by Congress. However, Republicans can be expected to oppose statehood of heavily Democratics Puerto Rico, just as they opposed attributed Congressional representation to Washington DC.

However, while Puerto Ricans are eager to strengthen their ties with the United States, some conservatives living in Red States are so disappointed with the election results that have petitioned the White House to allow their states to secede from the union.

According to Dana Milbank,

The White House, in one of those astro-turf efforts that make people feel warm about small-d democracy, launched a “We the People” program on its Web site last year, allowing Americans to petition their government for a redress of grievances. Any petition that receives 25,000 or more signatures within 30 days is promised a response (though not necessarily a favorable one) from the Obama administration.

And so a large number of patriotic Americans, mostly from states won by Mitt Romney last week, have petitioned the White House to let them secede. They should be careful about what they wish for. It would be excellent financial news for those of us left behind if Obama were to grant a number of the rebel states their wish “to withdraw from the United States and create [their] own NEW government” (the petitions emphasize “new” by capitalizing it).

Red states receive, on average, far more from the federal government in expenditures than they pay in taxes. The balance is the opposite in blue states. The secession petitions, therefore, give the opportunity to create what would be, in a fiscal sense, a far more perfect union.

Among those states with large numbers of petitioners asking out:

  • Louisiana (more than 28,000 signatures at midday Tuesday), which gets about $1.45 in federal largess for every $1 it pays in taxes;
  • Alabama (more than 20,000 signatures), which takes $1.71 for every $1 it puts in;
  • South Carolina (13,000), which takes $1.38 for its dollar; and
  • Missouri (16,000), which takes $1.29 for its dollar.

The first such petition (94,864 signatures so far) was for Texas:

Peacefully grant the State of Texas to withdraw from the United States of America and create its own NEW government.

This is not a new idea. Texas Governor Rick Perry proposed it three years ago. (See this video for the eager response by Keith Oberman.)

Hardin County Republican treasurer Peter Morrison writes “”Why should Vermont and Texas live under the same government? Let each go her own way.”

Meanwhile Doc Jess of DemConWatch writes:

For one reason, and one reason alone, I was in favour of Rick’s idea back then, and still am now. That’s the redistribution of their 38 Electoral College votes. And to a lesser extent the movement of that fence from the Mexican border to the Texas abutments with New Mexico, Oklahoma, Arkansas and Louisiana.

Of course, there are great benefits to the remainder of America if Texas goes: there are 52 Fortune 500 companies in Texas. While the oil industry might stay in this new country, it’s likely that AT&T, Dell, Whole Foods, Sysco, Kimberly-Clark, Southwest Airlines, Texas Instruments, and a host of others, will be looking for new places for their headquarters. Not to mention the 7 Air Force bases, 4 Army bases, and 3 Navy bases. Plus the economies that depend on them.

It will be tough for Texas when 37% of their income disappears. Not just from those companies and bases mentioned, but from the Federal receipts the state receives.

Presidential Campaign Fail To Vet Their Supporters

The Obama and Romney campaigns are both being attacked today having failed to vet their list of supporters.

Meanwhile, Romney has similar problems of his own:

  • Dr. John Willke is the doctor who misinformed Rep. Todd Aiken that women who are victims of “legitimate rape” do not become pregnant because their bodies “shut down” due to the trauma. Aiken is under pressure to abandon his US Senate campaign against Claire McCaskill in Missouri for having given voice to such an ignorant, misogynistic point of view. Dr. Willke told The Telegraph that he had a private meeting with Mitt Romney at his Cincinnati home last October and that Romney thanked him for his support and told him, “we agree on almost everything.”

    The 87-year-old endorsed Mr. Romney’s bid for the 2008 Republican presidential nomination and was one of his official campaign surrogates. “I am proud to have the support of a man who has meant so much to the pro-life movement,” Mr. Romney said at the time.

  • As we reported in June, the GOP selected Yossi Gestetner as their “Jewish Outreach Director” in New York. As reported by The Jewish Channel and Vos Iz Neias, “The newly appointed Director of Jewish Outreach for New York State’s Republican party has resigned from his position after just eight days in office, calling himself a distraction to the party.” The distraction? Espousing anti-Zionist positions, among others.

    As Vos Iz Neias notes,

    “According to a report by The Jewish Channel, Gestetner’s resignation came less than thirty minutes after Josh Rubin, a reporter for NY1, asked State Republican Party Chairman Ed Cox about an investigation of Gestetner by The Jewish Channel, which conducted an hour long on-camera interview with Gestetner. During that interview, Gestetner discussed several issues that may put him at odds with both the Republican party and many of New York State’s 1.6 million Jewish residents, which include his being a spokesman at a fundraiser to benefit an alleged child molester, his controversial stance on referring suspected cases of child abuse to a rabbi before alerting the authorities, his views on government assistance programs and his work for Torah True Jews Against Zionism, an anti-Israel organization that states that Zionism is contrary to Torah Judaism.”

 

Rick Santorum Crushes Romney In Missouri, Minnesota, Colorado


Sen. Rick Santorum (R-PA) turned the Republican primary upside-down yesterday winning all three contests yesterday over the “frontrunner” Gov. Mitt Romney (R-MA).

According to FiveThirtyEight blog’s Nate Silver:

In Minnesota, a state which Mr. Romney carried easily in 2008, he has so far failed to win a single county – and got just 17 percent of the vote. That put him 27 points behind Rick Santorum, and 10 points behind Ron Paul, who finished in second.

Missouri is a less important result since its beauty contest primary did not count for delegate selection and since turnout was understandably low there. But Mr. Romney lost all 114 counties in Missouri – and the state as a whole by 30 points, far more than polls projected.

Then there was Colorado, a state that has reasonably similar demographics to Nevada, which Mr. Romney carried easily on Saturday. Colorado has somewhat fewer Mormon voters than Nevada, which hurts Mr. Romney – but it has somewhat more wealthy ones, which favors him. The betting market Intrade gave Mr. Romney about a 97 percent chance of winning Colorado entering the evening. But he lost the state by 5 points to Mr. Santorum.

Mitt Romney will have some time to contemplate this turn of events. The next contests are the Arizona and Michigan primaries on Tuesday, February 28 followed by the Washington State and Maine caucuses on Saturday, March 3, and Super Tuesday, March 6 with voting in Alaska, Georgia, Idaho, Massachusetts, North Dakota, Ohio, Oklahoma, Tennessee, Vermont and Virginia.

The next debates currently scheduled will be held by CNN on February 22 at 8pm in Mesa, Arizona and a super Tuesday debate March 1 at 8pm in Atlanta, Georgia.  

States Won

  • Santorum: IA, CO, MN, MO
  • Romney: NH, FL, NV
  • Gingrich: SC
  • Paul: none