Minimum wages are going up. Are you ready?
The worker advocacy group National Employment Law Project projects that in 2018 21 states and 38 cities and counties will see their minimum wages increased as a result of ballot measures passed in previous years that will be taking effect. USA Today reports that in Maine, Colorado, Hawaii, Maryland and Rhode Island, the minimum hourly pay will go up from $9 to $10 next year and larger employers will see an increase to $15 per hour in New York City and San Francisco. Cities in California like Mountainview and Sunnyvale will see an increase from $13 to $15 per hour beginning on the first of the year.
For minimum wage advocates, the increases are welcome. Many believe the added income will close the gap between the wealthy and the poor and help generate more consumer demand. “The raises that workers have been fighting for the last five years are finally arriving in paychecks,” Paul Sonn, NELP’s general counsel said in the USA Today report. “They’re starting to get to a more meaningful level.”
Opponents, primarily those in the business community, have a different story to tell. They believe that the increased costs will force them to cut back on workers and invest in new technologies to replace people.
There some facts to back up their concerns. A University of Washington study circulated by the National Bureau of Economic Research earlier this year found that after Seattle’s minimum wage increased from $11 to $13 an hour in 2016 employers cut hours by nine percent (UC Berkeley performed a similar study but found negligible results). A study published this month by the Employment Policies Institute concluded that California’s upcoming $15 an hour minimum wage could cost the state 400,000 private sector jobs. A restaurant industry spokesman says that “dozens of eateries” have already shuttered as a result of the increases.
None of this seems to be changing the minds of state legislators. As I write this, 29 states where residents make up 60 percent of the workforce now have a minimum wage higher than the federal rate of $7.25 per hour and another 16 states have active campaigns in 2018 to lift their minimum wages even higher. Ten of those states — including Florida, Illinois, Massachusetts and New Jersey — are proposing $15 an hour minimum wages.
It’s good news for workers who are trying to keep their heads above water. But will it cost them their jobs?