Four States Vote to Increase Minimum Wage

After years of inaction by the U.S. congress, raising the minimum wage turns out to be a popular policy at the state level–even in heavily Republican states.

Arkansas increased its statewide minimum wage from $6.00 to $7.50 per hour starting January 1, 2015, then $8.00 starting January 1, 2014, then $8.50 starting January 1, 2016.

The minimum wage in Nebraska was raised from $7.25 to $8.00 per hour on January1, 2015, then to $9.00 on January 1, 2016.

Alaska‘s minimum wage will increase from $7.75 to $8.75 per hour on January 1, 2015, then $9.75 on January 1, 2016. It will then be adjusted upward for inflation each September for the following year, based on the Consumer Price Index for urban consumers from the Anchorage metropolitan area. In addition, employers may no longer credit tips or gratuities given to employees toward the required minimum wage, so that tipped employees will have to be paid the full minimum wage in addition to any tips or gratuities.

South Dakota raised its minimum wage from $7.25 to $8.50 per hour. They also tied minimum wage to increases in the cost of living, as measured by the Consumer Price Index. The hourly wage for tipped employees was also increased from $2.13 per hour to
fifty percent of the minimum wage as specified by the new law.

The voters of Illinois also passed a ballot initiative advising their state legislators to raise the state’s minimum wage to $10.00 per hour. But this ballot measure is non-binding, and the same Illinois voters also elected a governor who became notorious for advocating a decrease in the state’s minimum wage. So the likelihood of Illinois taking its citizens’ advice seems low.

While it has been widely argued and reported that a rising minimum wage tends to cause companies to shed jobs to deal with rising labor costs, the research seems to contradict this narrative. States that have raised their minimum wage have tended to experience faster job growth than others that did not.