Minimum wage could be a key part of the Democrats’ push on income
inequality during the 2014 midterm election season. Wages are
stagnating for many Americans.
By Mark Trumbull
WASHINGTON — Fourteen states are set to raise their minimum wage in
2014, but the hikes only highlight how far most of the country remains
from President Obama’s goal of a $9-per-hour minimum wage nationwide.
Even after the increases, only three states are poised to pay $9 or
more. On Jan. 1, residents of Washington State will see a boost to a
nation-leading $9.32 per hour, while Oregon’s minimum will rise to
Meanwhile, at mid-year, Californians will see their minimum wage jump
by $1, to $9 an hour, well above the current federal minimum of $7.25.
With Democrats including Mr. Obama vowing to make income inequality a
central issue during the 2014 midterm election season, the debate over
minimum wage is likely to resurface in coming months. Wage stagnation
is becoming a big challenge for households at most wage levels, and
Democrats see the minimum wage as a key part of a broader campaign
that can resonate beyond the small fraction of U.S. workers are
employed at base levels.
They point to statistics that show that, as the economy recovers from
the Great Recession, average hourly earnings are rising a bit faster
than inflation, but not by much. A brighter financial future, then, is
not just reviving growth but ensuring that gains are distributed more
evenly after years in which high-end jobs have outstripped the middle
and low-end ones in pay raises, they say.
For example, during the past 10 years, pay inflation-adjusted wages
for average workers have risen by about 0.3 percent per year.
Household incomes at the 10th percentile (10 percent of the way up the
ladder) were essentially the same in 2011 as in 1978, according to
Census data. The U.S. median household income (50th percentile) in
2011 stood a bit below where it had been in 1989, at about $50,000.
A November Gallup poll found that 76 percent of Americans said they’d
support hiking the minimum wage to $9. By contrast, small-business
owners are divided on the issue, with 47 percent supporting a hike and
50 percent opposed to boosting the rate to $9.50, according to an
October Gallup survey.
The Obama administration embraced the goal of a $9 minimum in an
economic plan in February.
Critics warn that raising the minimum wage could hinder job creation
at a time when millions of Americans are having trouble finding work.
But many economists have been shifting in recent years toward
welcoming modest hikes in minimum pay.
An early 2013 survey of several dozen prominent economists, by the
University of Chicago’s IGM Forum, found 47 percent supported a hike
to $9 an hour and adjusting the rate annually (as some states do) for
inflation. Only 11 percent thought the change undesirable, while the
rest were uncertain or had no opinion. Essentially, the economists
agreed the change raises the incomes of an array of low-wage workers,
in part because it can have a “trickle-up” influence on what employers
offer for jobs that pay a bit above minimum. But the economists split
on whether the $9 wage would hurt job prospects for low wage workers.
Aside from Washington, Oregon, and California, 11 other states are
raising their minimum wage in 2014. They are Arizona, Colorado,
Connecticut, Florida, Missouri, Montana, New Jersey, New York, Ohio,
Rhode Island, and Vermont. Base pay in those states will range from
$7.50 in Missouri to $8.73 in Vermont.