Since 2009, the national minimum wage has been $7.25 per hour in the United States. This minimum wage was a rise from $6.55 per hour and a product of the last changes in a set of increases approved by democratic-dominated Congress in 2007 (Bendery 2014). In spite of requests from democrats between 2012 and 2014, Congress has not raised the federal minimum wage. As a result, an advanced group of experts, CEPR (Center for Economic and Policy Research), created an online ticker to show legislators and the public the amount of purchasing power that minimum wage employees lost since 2009 (Bendery). The ticker is proof that a fixed minimum wage in essence adds up to a constant wage cut for millions of American employees because their incomes do not increase with the cost of living.
Although five years is a long time, it is not peculiar for the federal government to go for long periods without raising the minimum wage. Between 1997 and 2007, the government did not raise incomes for all civil servants despite the drastic change in inflation (Desilver 2014). According to CEPR, this rise is crucial for employees if they are to keep up with the economy’s rate of inflation. This think tank projected that American minimum wage workers would have enjoyed an extra $6 billion if their minimum wage since 2009 had kept up with inflation (Bendery). The constitution requires Congress to act accordingly if minimum wage workers are to see a rise from the current $7.25 per hour. This power by legislators triumphs in the 29 states that still do not demand an increase (Bendery).
Many states have set minimum wages above the federal state’s wage floor. Some of these increases have been very ambitious. For instance, Seattle passed a law that will eventually increase the state’s wage floor to $15 per hour and match the current rate of inflation (Bendery). Other states have raised their wage floors through ballot measures to allow their citizens to meet the risen costs of living. In South Dakota, Alaska, Nebraska and, Arkansas, state authorities approved minimum wage raises through an election in 2014 while Illinois legislators passed an advisory measure to raise the state’s wage floor (Gascon 2014). The 2014 session has seen multiple other states join in the campaign to raise minimum wages. Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Rhode Island, Vermont, West Virginia, and D.C. approved wage increases in the course of the 2014 session. By August 2014, a total 23 states had wage floors above the federal one (Gascon).
States that raised their wage floors the earliest have witnessed quicker job growth than those that did not. According to the Labor Department, 13 of the 23 states that have raised their wage floors have recorded more job opportunities for the unemployed than states that still abide by the federal minimum wage (Bendery). This trend echoes rising concerns regarding the unequal spread of minimum wage jobs in the United States. The federal wage floor simply creates millions jobs for financially stressed Americans, which is inadequate for driving quicker economic growth. Even though raising the minimum wage has proven advantageous for many states, it could possibly cause employers to lay off a certain portion of their staffs. This is because increasing the wage floor means more employer costs (Davidson 2013).