The minimum wage will increase in several U.S. states in 2017. Over 4 million American workers will see more money in their paycheck as new minimum wage laws in 20 states go into effect next week.
Minimum wage rates in Massachusetts and Washington will be the highest with workers starting at $11 per hour. In California, businesses with 26 or more employees will be required to pay $10.50, enhancing the paycheck of nearly 1.7 million workers.
For the state of New York, the minimum wage rate will depend on where you live. There will be an $11 per hour mandated for workers in New York City and $10 in some suburbs. The rest of the state will see a minimum of $9.70.
The minimum wage rate in New York City will gradually increase to $15 by 2019. Under a different wage increase law, fast-food businesses will be required to pay workers $12 an hour starting after the new year.
“This $1.50 increase, I cannot even comprehend or tell you how important this will be,” Alvin Major, a New York City fast-food worker, told the Washington Post. “The price of food has gone up. Rent has gone up. Everything has gone up…. This will make a difference for so many people.”
Workers in Arizona, Maine, and Colorado will see their income increase as well after voters approved a minimum wage increase in November. Several other states, including Ohio and Florida, are raising wages based on indexing.
In Arizona, several businesses, with assistance from the Chamber of Commerce and Industry, are fighting the minimum wage increase. They have filed a lawsuit to stop the state from raising the rate from $8.05 to $10.
However, the Arizona Supreme Court has decided not to stop the minimum wage increase to set to go into effect next month. The court may reconsider the case in February. Nearly 12 percent of Arizona’s workforce will be affected by the minimum wage increase.
While workers and labor advocates contend the minimum wage increase will help low-wage employees pay bills and help the economy, opposing businesses argue the higher wage rate will increase prices, encourage automation, and send jobs overseas. Many restaurant owners will be forced to either reduce portion sizes or charge for side dishes that normally come with a meal in order to pay a higher wage.
“I’m sure prices will go up where they can, but restaurants want to avoid sticker shock,” said Melissa Fleischut of the New York State Restaurant Association. “They’re going to have to get creative.”
While there may be benefits to a minimum wage increase for workers, it also discourages businesses from hiring more staff, or worse, forcing them to let workers go. A study done two years ago by the Congressional Budget Office found increasing the federal minimum wage to $10.10 would decrease new jobs by 500,000.
“The minimum wage is not a great tool for helping those at the bottom,” said Ben Gitis, director of labor market policy at the American Action Forum, as cited by the Wall Street Journal. “The people who end up losing their jobs are the most vulnerable in the labor market.”
Meanwhile, according to the report, over 16 million workers would get a pay raise. The national minimum wage rate was set at $7.25 in 2009.
While many states follow the federal minimum wage rate, others automatically adjust according to inflation. Others need new legislation to raise pay for workers. Some cities, including Chicago and Seattle, have passed local ordinances that require businesses pay a higher wage than the state minimum.
Other states increasing minimum wage rates are Arkansas, Connecticut, Hawaii, Michigan, and Vermont. The 2017 wage adjustments in several states are just the beginning as a nationwide movement continues to grow to bring the federal minimum wage up to $15 per hour.