Thursday, April 26, 2018
Business

Inflation tie-in drives wide minimum wage disparity among states

OLYMPIA, Wash. — With a bump in the minimum wage to $9.19 an hour today, high school student Miranda Olson will edge closer to her goal of purchasing that black Volkswagen Beetle she's been researching online.

Olson works part time, after classes and on weekends. But the extra pennies she'll earn in 2013 will add up over the coming weeks and months.

"It's not much, but it's something," said Olson, 16, who works at Wagner's European Bakery and Cafe in Olympia. "Every bit helps."

Many workers around the country won't be as lucky as the ones in Washington state, which is raising its salary minimum even though it already has the highest state baseline in the country. Workers one state over — in Idaho — will make nearly $2 per hour less in 2013.

Automatic minimum wage increases designed to compensate for inflation have steadily pushed up salaries in some states, even through the recession, expanding the pay gap between areas that make annual adjustments and those that don't. Of the 10 states that will increase the minimum wage today, nine did so automatically to adjust for inflation. Among them is Florida, where the minimum wage goes up today by 12 cents per hour to $7.79.

Along with Washington and Florida, the changes will also occur in Arizona, Colorado, Missouri, Montana, Ohio, Oregon, Rhode Island and Vermont.

The national minimum wage floor is $7.25 an hour.

Paul Sonn, legal co-director at the National Employment Law Project, hopes more states will start looking at automatic adjustments as the economy recovers. He said the model — which Washington first adopted in 1998 — helps avoid sudden jolts as states try to catch up to their peers.

"We think there's a case that it's better for everyone, including the business community, to have predictable, regular, small increases every year," Sonn said.

The automatic adjustments aren't much. Washington's bump of 15 cents will mean those who work 40-hour weeks will earn an extra $6 per week — or about $300 per year.

Hundreds of thousands of workers are expected to get a pay increase with the wage adjustments that begin today. Among the nine states with automatic adjustments happening this year, the average minimum wage is $8.12 per hour, up from a little under $8. States that do not have automatic changes operate with an average minimum wage of about $7.40 — a difference of about $1,500 per year for a full-time worker.

Groups like the National Restaurant Association oppose further increases in federal or state minimum wages, arguing that it's an ineffective way to reduce poverty and forces business owners to cut hours, raise prices or lay off workers.

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