PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

21 States Increased Minimum Wage Mandate at Start of 2020  

By at 2 January, 2020, 2:49 pm

by Raymond J. Keating-

A government mandated minimum wage makes no sense from an economics standpoint. After all, government cannot arbitrarily declare that a certain job is worth X dollars per hour – or that it is worth X dollars more per hour today as opposed to yesterday – without there being consequences. Government fails to possess such mystical abilities.

Therefore, when the government imposes a minimum wage mandate, costs obviously arise. Those costs are paid for by, for example, young, inexperienced and/or low-skilled workers who see fewer job opportunities. In addition, labor-intensive businesses must wrestle with increased labor costs by reducing other costs, or experiencing reduced returns on the business. Indeed, labor-intensive firms operating on thin margins face significant difficulties when the government minimum wage mandate is hiked.

Unfortunately, many politicians and voters prove themselves time and gain quite adept at ignoring economic common sense when it comes to the minimum wage. While most economists agree that minimum wage increases hurt those young, inexperienced, and/or low-skilled workers, along with assorted small businesses, a minimum wage increase polls well among the public, with assorted politicians always willing to tap into that political popularity for votes.

Hence, we see many states and localities across the nation inflicting economic ills via minimum wage increases.

As of the start of 2020, 21 states increased their state minimum wage mandate, with 4 states seeing increases later this year:

● Alaska increased its minimum wage mandate from $9.89 per hour to $10.19.

● Arizona’s minimum wage went from $11 per hour in 2019 to $12.

● Arkansas hiked its minimum wage from $9.25 to $10 per hour.

● California’s top minimum wage mandate went from $12 in 2019 to $13 in 2020.

● Colorado increased its minimum wage from $11.10 per hour to $12.

● Connecticut’s mandated minimum wage is scheduled to increase from $11 to $12 in September 2020.

● Florida saw its minimum wage move up from $8.46 to $8.56 per hour.

● Illinois increased its minimum wage mandate from $8.25 to $9.25 as of January 1, 2020, and it will increase once again in July to $10.

● Maine hiked its minimum wage from $11 to $12.

● Maryland increased its minimum wage mandate from $10.10 per hour to $11.

● Massachusetts’ minimum wage went from $12 in 2019 to $12.75.

● Michigan increased its minimum wage from $9.45 per hour to $9.65.

● Minnesota’s top mandated minimum wage increased from $9.85 in 2019 to $10.

● Missouri increased its minimum wage from $8.60 in 2019 to $9.45 in 2020.

● Montana increased its minimum wage from $8.50 to $8.65 per hour.

● Nevada’s top minimum wage mandate will go from $8.25 per hour to $9 in July 2020.

● New Jersey jacked up its minimum wage mandate from $10 per hour to $11.

● New Mexico increased the state minimum wage from $7.50 to $9 per hour.

● New York pushed up its minimum wage mandate on a regional basis, with smaller businesses in New York City seeing an increase from $13.50 to $15 per hour; the Long Island and Westchester County mandate went from $12 to $13; and the upstate mandate went from $11.10 to $11.80. And the mandate on fast food restaurants went from $12.75 outside of New York City (where it already stood at $15) to $13.75 in the rest of the state.

● Ohio’s minimum wage went from $8.55 per hour to $8.70.

● Oregon is scheduled to experience a minimum wage increase in July 2020, with the mandated rate in Portland going from $12.50 to $13.25; along with the “standard” rate going from $11.25 to $12, and the rural wage mandate from $11 to $11.50.

● South Dakota’s minimum wage was pushed up from $9.10 per hour to $9.30.

● Vermont’s minimum wage went from $10.78 to $10.96 per hour.

● Washington pushed up its state minimum wage mandate from $12 per hour to $13.

Keep in mind, that this list only focuses on state-level minimum wage issues. Assorted localities across the country also have imposed and/or increased minimum wage mandates within their boundaries.

Minimum wage laws cannot change the laws of economics. Compensation is based on productivity, including the value that an individual brings to a business. When government messes with economic reality, there always are costs to be paid, and in the case of the minimum wage, those costs are born by workers, businesses and consumers.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council.

 

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