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Josh Lower

The state of minimum wages

by Josh Lower | Dun & Bradstreet Editor

February 15, 2013 | 2 Comments »


Earlier this week during his State of the Union address President Obama called on Congress to significantly increase the country’s minimum hourly wage. The President has proposed raising the federal minimum wage in stages to $9 in 2015 and indexing it for inflation thereafter.

Because federal law does not currently require inflation adjustments to the minimum wage, many states implement their own wage increases. Workers in ten states saw minimum wages increase at the beginning of 2013:

  • Arizona increased its wage 15¢ to $7.65
  • Colorado increased its wage 14¢ to $7.78
  • Florida increased its wage 12¢ to $7.79
  • Missouri increased its wage 10¢ to $7.35
  • Montana increased its wage 15¢ to $7.80
  • Ohio increased its wage 15¢ to $7.85
  • Oregon increased its wage 15¢ to $8.95
  • Rhode Island increased its wage 35¢ to $7.75
  • Vermont increased its wage 14¢ to $8.60
  • Washington increased its wage 15¢ to $9.19

Wage hike debates are ongoing in several other states, but for now only 18 states and the District of Columbia have minimum wage rates that exceed the national rate.

Advocates for an increase to the federal minimum argue that current wage levels haven’t kept up with inflation and a full-time worker earning minimum wage can’t afford to support a family. While many business groups oppose wage increases — the National Federation of Independent Businesses, for one, opposes any effort to increase the federal wage rate — some employers believe higher wages translate to better employees and lower turnover. Wage increases can also boost sales for some businesses; large retailers, in particular, tend to benefit from rising disposable income levels.

Businesses that could be affected by an increase to federal wage requirements will want to monitor the situation closely. However, early indications suggest that the President’s chances of getting a wage hike bill through Congress during 2013 are little better than they were last year.

(First Research recently updated minimum wage rates in our State and Province profiles.)


Picture by 401K 2013, used under a CC-Share Alike license.

Rebecca Mallett

Great post, Josh. The minimum wage is such an important issue. I personally think increasing the federal minimum wage is a win-win for workers and businesses. Long-term, if the wage does not rise, workers will not only remain below the poverty level, which has implications for them personally, but also won’t be able to buy goods and support business growth.

Here is an interesting tidbit from a policy report released by the Institute for Urban Policy Research & Analysis (IUPRA) at The University of Texas at Austin:

“To illustrate the adverse effects of a stagnant minimum wage, the analysis points to Texas, which has the largest number of low-wage workers ($7.25/hour) in the nation, according to the Bureau of Labor Statistics. Despite its national reputation for economic growth, Texas ranks sixth in the number of people living in poverty, and its poverty rate is growing faster than the national average, according to the 2010 U.S. census.” http://www.utexas.edu/news/2012/12/19/raising-minimum-wage-single-mothers-out-of-poverty-boosts-economy/

I think the minimum wage should be raised to $9.00 an hr. It would help millions of minimum wage earners big time!

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