This Is The Minimum Wage Increase For 2016
14 states are going to enact a minimum wage increase by Jan. 1, 2016 meaning a happy new year for many workers. The increases range from 5 cents an hour in South Dakota to $1 in California and Massachusetts. 21 states still have a lower state minimum wage than the federal rate of $7.25 (so the federal rate takes precedence).
It’s important to understand the importance more take home pay means for the fight against poverty. We talked about the impact of a wage increase on the poor and its effect on employment.:
More than 500,000 employees of federal contractors make less than $12 an hour. When more than 500 federal contractors working in service-industry type jobs (sewing military uniforms and driving trucks specifically) were interviewed, more than 70% made less than $10 an hour. In 2011, if the now proposed $10.10 minimum waged had been enacted, 58% of the nation’s ten million working poor would have been elevated out of poverty.
Moreover, about 60% of the poor don’t work, and 53% of workers who would benefit from a higher minimum wage come from families with incomes above $35,000, including 22% with incomes exceeding $75,000. A Congressional Budget Office study issued last year found that a single parent with one child earning between $15,000-$25,000 experiences almost no financial benefit from working additional hours or getting a raise. Earnings would have to exceed 150-200% of the poverty level to compensate for lost social welfare programs.
Increasing the minimum wage is estimated to create 85,000 new jobs. Company owners surveyed last year by the advocacy group Small Business Majority supported a higher minimum wage. Two-thirds wanted the wage increased from the current federal minimum with annual adjustments for inflation. 85% said they paid their employees above the minimum.
Conversely, two-thirds of minimum wage workers earn a raise within one year. Raising the minimum wage makes such entry level positions less available.