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Differences in minimum wages fuel debate topic

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press

Should it be automatically adjusted for inflation?

Wednesday, January 2, 2013 - 2:16 pm

OLYMPIA, Wash. — With a bump in the Washington state minimum wage to $9.19 an hour, high school student Miranda Olson will edge closer to her goal of buying the black Volkswagen Beetle she's been researching online.

Olson is only able to pick up part-time hours working at a cafe after classes and on weekends. But the extra pennies she'll earn in 2013 will add up over the coming weeks and months.

“It's not much, but it's something,” said Olson, 16, who works at Wagner's European Bakery and Cafe in Olympia. “Every bit helps.”

Many workers around the country won't be as lucky as residents of Washington state, which raised its minimum wage Tuesday by 15 cents an hour, even though it already has the highest state baseline in the country.

Minimum-wage workers in Idaho will make nearly $2 an hour less in 2013 than their counterparts living just one state to the west.

Automatic increases designed to compensate for inflation have steadily pushed up wages in some states, even through the recession, expanding the pay gap between areas that make annual adjustments and those that don't. Of the 10 states that increased the minimum wage Tuesday, nine did so automatically to adjust for inflation.

Rhode Island lawmakers approved that state's wage increase in the past year.

Paul Sonn, legal co-director at the National Employment Law Project, said he hopes more states will start looking at automatic adjustments as the economy recovers. He said the model — which Washington state adopted in 1998 — helps avoid sudden jolts as states try to catch up with each other.

The automatic adjustments aren't much. Washington's bump will mean those who work 40-hour weeks will earn an extra $6 a week — enough for a couple lattes — or about $300 a year.

Hundreds of thousands of workers are expected to get a pay increase with the wage adjustments that begin New Year's Day. Along with Washington and Rhode Island, the changes will occur in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon and Vermont.

Among the nine states with automatic adjustments, the average minimum wage is $8.12 an hour, up from a little under $8. States that do not have automatic changes operate with an average minimum wage of about $7.40 — a difference of about $1,500 a year for a full-time worker.

Many states, including Idaho, follow the federal minimum wage of $7.25 an hour, either because they've tied their minimum wage to that threshold or because the state-enacted minimum is lower than that.

San Francisco has set the highest local minimum wage and will have workers paid at least $10.55 an hour in 2013.

Groups such as the National Restaurant Association oppose such minimum wage raises, saying it forces owners to slash hours, raise prices or lay off staff.