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Minimum Wage Hikes Coming in Eight States

David Callahan

Does $9.04 an hour sound like a lot of money to you? Probably not. But it's a $1.79 more than the federal minimum wage of $7.25 and, starting January 1, $9.04 be the new minimum wage in Washington State.

Seven other states will also be raising their minimum wages on January 1. As the Economic Policy Insitute reports:

There are eight states that have legislated annual, inflation-linked increases in their minimum wage.  This “indexing” of the minimum wage ensures that the real value of the lowest-paid workers’ wages does not shrink as normal costs of living go up. On Jan. 1, 2012, minimum-wage workers in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington will all see an increase in their paychecks.

The table below describes the workers affected by the increase. Across these eight states, an estimated 1,045,000 workers will be “directly affected.”  These are workers whose current wages are between the existing state minimum wage and the new Jan. 1 minimum wage. In addition, another 394,000 workers will be “indirectly affected” by the increase. These indirectly-affected workers are those whose current wages are just above the new Jan. 1 minimum, and are likely to also see a wage increase as employers adjust their overall pay structures to reflect the new minimum (the “spillover” effect).

If all this sounds good, keep in mind that the minimum wage hikes only apply to 8 states and even in Washington State the minimum will still be lower than it should be. If the federal minimum wage had kept pace with inflation since 1968, it would be nearly $10 an hour.