Money money money money...

Mark, a yen, a buck or a pound,

That clinking, clanking, clunking sound,

Is all that makes the world go 'round,

It makes the world go 'round!

--By FRED EBB, JOHN KANDER (from the musical Cabaret)

 

It happens every new year – state minimum wages go up, and the federal Fair Labor Standards Act (“FLSA”) minimum remains fixed at a mere $7.25 an hour due to partisan gridlock. Here in 2024, CNN sagely reports that 22 states and in at least 40 cities and counties across the country have increased their minimum wage. See https://www.cnn.com/2023/12/06/success/minimum-wage-increases-2024/index.html#:~:text=The%20highest%20state%20minimum%20wage,is%20hiking%20it%20by%20%242. This happens because of affirmative changes in the law, or by simple indexing in some jurisdictions based on inflation.

Here is what CNN reports:

Come January 1, seven states and the District of Columbia will have minimum wages of $15 or more, up from just four states plus DC this year. The newcomers to the category are Maryland, New Jersey and most of New York State (with the exception of New York City, Westchester and Long Island, which already had a $15 minimum in place and where the minimum wage is increasing to $16 in the new year).

The highest state minimum wage in 2024 will be Washington state, at $16.28, up from $15.74 currently. A close second is California, which is raising its minimum to $16 from $15.50 today.

The state with the biggest jump in its minimum wage next year will be Hawaii, which is hiking it by $2.

January 1 isn’t the only day minimum wages will go up. Some states, such as Nevada and Oregon, have increases set for July 1. Florida’s minimum will go up on September 30.

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CNN also gives a list of the following changes in state minimum wages  in 2024:

Alaska: $11.73, up from $10.85

Arizona: $14.35, up from $13.85

California: $16, up from $15.50

Colorado: $14.42 (proposed), up from $13.65

Connecticut: $15.69, up from $15

Delaware: $13.25, up from $11.75

Florida: $13, up from $12, on September 30

Hawaii: $14, up from $12

Ilinois: $14, up from $13

Maine: $14.15, up from $13.80

Maryland: $15, up from $13.25 for large employers and $12.80 for small employers

Michigan: $10.33, up from $10.10

Minnesota: $10.85 for large employers, up from $10.59; $8.85, up from $8.63 for others

Missouri: $12.30, up from $12

Montana: $10.30, up from $9.95

Nebraska: $12, up from $10.50

Nevada: $12, up from a $10.25 or $11.25 (depending on health benefits) – effective July 1, 2024

New Jersey: $15.13, up from $14.13

New York: $15, up from $14.20 (except in New York City, Westchester and Long Island, where it is set at $16, up from $15)

Ohio: $10.45, up from $10.10

Oregon: Its $14.20 minimum wage will adjust for inflation on July 1

Rhode Island: $14, up from $13

South Dakota: $11.20

Vermont: $13.67, up from $13.18

Washington: $16.28, up from $15.74

District of Columbia: Its $17 minimum wage will adjust for inflation on July 1.

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And as CNN emphasizes, don’t forget changes in local laws. Tukwila, WA  has the nation’s highest generally applicable minimum wage, hitting $20.29, followed closely by Seattle, WA at $19.97.

Now here is where things get complicated. Raising the minimum wage isn’t a zero sum game. There are obvious winners, like fast food workers. But more expensive burgers, mean more inflation. The middle class feels squeezed by inflation in part caused by rising wages, but not evenly distributed benefits. People are net richer on average these days, but some are not beneficiaries of the increased wages or the higher interest rates paid by banks. They just pay the price of diminished living standards as a result of inflation. The losers are particularly mad about the inflation.

Even the minimum wage “winners” are worried. The minimum wage workers who get a raise may end up losing their job to automation. Businesses respond to minimum wage increases, if they can, by trying to make gains in labor productivity. That means automation and more robots eventually. The future hold a vision of less minimum wage fast food workers producing cheap burgers.

For the now, though, there is a clash between boosting compensation for America’s most vulnerable workers and controlling the spiraling cost of services and goods sold to consumers. There is no free lunch.