New Year Brings Late Holiday Gift, Increase In Minimum Wage
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MIAMI (CBSMiami) – When the clock strikes midnight to ring in the new year, it will also ring in an increase for Florida and a dozen other states.
On January 1st, 2014 Florida’s minimum wage will increase by 14 cents to $7.93 per hour, benefiting an estimated 416,000 low-wage workers in the state.
The minimum wage for tipped workers in Florida will also rise by 14 cents to $4.91 per hour.
The increased consumer spending generated by Florida’s minimum wage increase will boost economic growth by $62.7 million, according to an analysis by the nonpartisan Economic Policy Institute.
“As Congress drags its feet on raising the federal minimum wage, more and more Americans are earning poverty-level wages in expanding industries like retail and fast food,” said Christine Owens, executive director of the National Employment Law Project. “In the face of federal inaction, states are boosting the paychecks of the lowest-paid workers, promoting growth and consumer spending, and hopefully providing an example for Congress to follow.”
Florida’s minimum wage increase was the result of a ballot initiative approved by voters in 2004. The measures provides for annual rate adjustments to keep pace with the rising cost of living.
In total, the minimum wage increases taking effect in all 13 states on January 1st will generate over $619 million in new economic activity and support the creation of 4,600 new full-time jobs as businesses expand to meet increased consumer demand.
Eleven total states have adopted annual inflation indexing for their minimum wages – in addition to Florida. These states include Arizona, Colorado, Missouri, Montana, Nevada, Ohio, Oregon, Vermont, Washington, and New Jersey, where voters approved a measure in November to raise the state’s minimum wage to $8.25 per hour and index it to rise with inflation thereafter.
Because the federal minimum wage is not indexed to rise with inflation, its real value erodes every year unless Congress approves an increase.
The Fair Minimum Wage Act of 2013, supported by President Obama and introduced in the U.S. Senate and House of Representatives earlier this year, would help recover much of this lost value by raising the federal minimum wage to $10.10 per hour and adjusting it annually to keep pace with the rising cost of living.
The Fair Minimum Wage Act would also gradually raise the minimum wage for tipped workers from its current low rate of $2.13 per hour, where it has been frozen since 1991, to 70 percent of the full minimum wage.
As of January 1st, 2014, twenty-one states, plus the District of Columbia, will have minimum wage rates above the federal level of $7.25 per hour, which translates to just over $15,000 per year for a full-time minimum wage earner.