Half of U.S. states will raise their minimum wage in 2021—and more pay hikes could be on the way

People collect collectively to ask the McDonald’s company to raise employees wages to a $15 minimum wage in addition to demanding the proper to a union on May 23, 2019 in Fort Lauderdale, Florida.

Joe Raedle | Getty Images

The transfer towards a $15 minimum wage gained more floor in 2020 by means of the electoral victory of President-elect Joe Biden and yet one more state voting in favor of an eventual $15 pay ground.

Next yr, half of U.S. states will raise their minimum wage, up from 21 in 2020. All however 5 of these states — Connecticut, Florida, Nevada, Oregon and Virginia — will hike their hourly minimum on Friday.

And the federal minimum wage, which hasn’t recorded a rise in more than a decade, could lastly get a lift, affecting tens of millions of employees starting from restaurant cooks to janitors. Biden has pledged to spice up it to $15 an hour and get rid of the tipped minimum wage, which is the low base pay given to staff who make most of their compensation from suggestions. He has additionally stated he would index minimum wage to match inflation. All three measures are in line with a invoice handed by the House in 2019.

Critics say {that a} greater minimum wage hurts small companies and causes job losses — and would add even more stress throughout an financial disaster brought on by the coronavirus pandemic. But this yr’s occasions have additionally raised new consciousness about the necessary roles held by hourly employees, in addition to their low wages. An evaluation by employment web site Snagajob discovered that three-quarters of hourly employees in the U.S. have been higher off sticking to unemployment advantages as an alternative of discovering a brand new place when the federal complement was $300 per week.

“I’m not sure if the pandemic itself affects the likelihood of a minimum wage increase because it’s a fundamentally political decision,” stated Daniel Zhao, senior economist at jobs web site Glassdoor. “I think that the pressure has been rising over the last few years.”

Whether Biden will get the probability to raise the minimum wage will probably come all the way down to runoff election outcomes in Georgia, the place each Senate seats are up for grabs on Tuesday.

There’s rising proof that voters on each side of the aisle help a $15 minimum wage. In November, Florida turned the eighth state to decide on to part in a pay ground at that charge, because of a poll referendum accepted by 60% of voter in an election in which Donald Trump received.

Even if a brand new federal minimum wage would not get handed, it is probably that more states will comply with Florida’s instance. Zhao stated activists have turned most of their consideration to altering the pay ground at the native stage, which is a better aim than a brand new nationwide mandate.

According to Snagajob CEO Mathieu Stevenson, states are additionally taking a look at the areas that handed a $15 minimum wage years earlier to grasp its full affect. Seattle was the first U.S. metropolis to raise the pay ground to that charge in 2014 after a coordinated push from fast-food employees. Other cities, together with San Francisco, New York and Washington, have adopted.

“What we continue to hear on the ground is people have been looking to what are the early results from D.C. and other markets that implemented the $15 minimum wage,” Stevenson stated. “As people get more comfortable with the results and the impact it’s had on the economy, I think we’ll continue to see that at the state level.”

More firms have additionally stepped as much as raise their inside pay flooring to maintain up with competitors and assist with turnover. Bank of America and Amazon are amongst the employers which have already been paying their employees more than $15 an hour.

The widespread unemployment sparked by the pandemic abruptly stopped the wage progress skilled by hourly employees in 2019, however some of the nation’s largest firms introduced greater minimum wages as they tried to recruit new staff.

After mountaineering barista wages by 10%, Starbucks stated it will raise its minimum wage to $15 an hour over the subsequent three years. Walmart, the nation’s largest personal employer, raised its hourly charge for deli and bakery employees from $11 to $15, whereas hourly management roles now obtain $18 to $21 per hour.

Zhao predicts the upward wage progress of 2019 could return in the second half of 2021 if unemployed employees wrestle to seek out new jobs or determine to decide out of working. He cited a rising concern about ladies who dropped out of the workforce throughout the pandemic as a result of of little one care.

“There is an open question as to how difficult it will be to get those workers to the labor force,” Zhao stated. “If it’s very difficult to get those workers back, it would put upward pressure on wages, especially for lower income workers and low-wage industries like food service.”

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