With all of the claims about how great the economy is right now, the data shows that the average Kentuckian’s wages remained flat in 2018, continuing the trend of nearly the last two decades. Unemployment is certainly lower than it’s been in a long time and the job market continues to tighten in parts of the state, but Kentucky workers are not experiencing the kind of wage growth and improvement in standard of living that such an economy should afford.
Wrapped into his 2019 budget proposal, Governor Wolf has proposed to raise the minimum wage in July 2019 to $12/hour, with yearly 50-cent increases until it reaches $15/hour in 2025. After 2025, the minimum wage would be adjusted for inflation. Also included in this plan is to eliminate the separate tipped minimum wage of $2.83/hour—tipped workers would earn $12 in July 2019 and would follow the same scheduled changes each year.
This increase is needed to make up for the declining value of the minimum wage over time. Figure 1 shows the minimum wage relative to the median wage for full-time, full-year workers in Pennsylvania over time. In 1968, the minimum wage was 51% of the median wage in Pennsylvania; the minimum was $1.60 compared to the median of $3.15. As you can see by the dark blue line, this value has decreased steadily over time. Today, the minimum wage is only 30% of the median wage in Pennsylvania. Doing nothing and maintaining a $7.25 minimum wage will result in this falling to 26.3% by 2025. Alternatively, Governor Wolf’s plan to raise the minimum wage to $15/hour by 2025 will bring the minimum back to about half of the median wage, where it was in the late 1960s.
Everyone deserves fair pay for the hours they work, and the freedom to have a personal life away from the job. The more we work, the less time we have for ourselves, our families, and our communities. That’s why we have federal and state overtime laws, which require that most workers be paid time-and-a-half for every hour they work over 40 in a given week. It’s a straightforward bargain: when workers give up scarce personal time for their job, that time becomes more valuable. Employers then have to balance their demand for more hours from their employees with the increased costs of such a demand.
Unfortunately, this bargain has broken down when it comes to millions of modestly paid salaried workers across the country, including hundreds of thousands in Massachusetts. Almost all workers paid by the hour are automatically covered by overtime protection. For workers paid a salary, however, weak, outdated, and confusing overtime laws make it easy for employers to require them to work 50, 60, or more hours in a week without paying them anything more than if they had worked 40 hours. When this happens, salaried workers end up sacrificing their personal time—for free.
Raising the minimum wage to $17 by 2024 would give 269,000 Hawai‘i workers a pay increase. This means that, in 2024, about four in 10 Hawai‘i workers would earn roughly $4,356 more each year than they do today. This raise would especially help working women and parents in low- to middle-income households, helping to keep them and their families out of poverty and homelessness.
By 2024, Hawai‘i’s minimum and near-minimum wage workers would receive a total of over $1.3 billion in additional wages. Not only would such a pay increase help to improve the living standards of affected Hawai‘i workers, it but would also strengthen local businesses, as low-wage workers plow almost every additional dollar of earnings back into the local economy.
Decades of research has shown that past minimum wage increases have achieved their intended effects: raising pay for low-wage workers with little to no negative impact on employment. Moreover, studies that have looked beyond the narrow question of employment impacts have found clear, meaningful benefits from higher minimum wages to low-wage workers, their families, and their broader communities and economies.