National Consumers League

Unemployment benefits may rise


By Sally Greenberg, NCL Executive Director Right now, the federal minimum wage rate applies everywhere except in states that set higher minimum rates, where 18 states have minimums higher than the federal rate and 23 have the same requirement. Some jobs, such as on small farms, are exempt from minimum wage rules. Last month, the minimum wage automatically rose in eight states — Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington — that index it to cost-of-living increases.  USA Today recently produced this helpful chart on state-by-state minimum wages. There’s been some recent activity in states around the country to raise the minimum wage; bills were introduced to boost the minimum wage from $7.25 to $8.50 in New York and from $8.25 to $9.75 in Connecticut, indexing further increases to inflation. Seven other states —New Jersey,  Delaware, Hawaii, Illinois, Massachusetts, California, and Missouri — are also weighing basic wage increases. The National Employment Law Project, an organization that does advocacy and research on behalf of the working poor,  says the federal minimum should be raised to $10 to make up for the failure to keep pace with inflation in the 1970s. Since the recession began, the inflation-adjusted salaries of low-wage workers have fallen 2.3 percent. About 1.8 million of the US’s  73 million hourly workers earned the federal minimum wage in 2010 — many in the retail, restaurant and hospitality sectors — but the fact is that people earning a bit more than minimum wage will see their compensation rise too. Noting that low-wage workers spend nearly all of their extra income, the Economic Policy Institute estimates such an increase would generate an extra $20 billion in economic output and 160,000 jobs. Business groups  typically oppose minimum-wage increases because they  have to pay more in compensation and benefits. But this dance occurs every time the minimum wage goes up and business usually goes along with it. They come around because they understand ultimately that the more people at the lower end of the economic spectrum earn, the more they spend on the necessities – groceries, utilities, transportation, clothing  etc – all of which stimulates the economy and is ultimately good for business.  NCL’s Florence Kelley wrote the first minimum wage laws in the United States, and she was right  - these protections have proved critically important for those who work hard but earn the least.