Nearly one in six Americans lived in poverty last year, according to recently released data from the U.S. Census Bureau. Many states choose to combat poverty rates by increasing the minimum wage. As of this year, 18 states have set their minimum wage rates higher than the federal minimum of $7.25 per hour, according to the National Employment Law Project (NELP).
In 2007, the national minimum wage was increased for the first time in a decade, from $5.15 to $5.75. Over the next three years, the federal minimum wage increased each year until 2009, when it hit its current rate of $7.25.
[Blaze note: Watch to find out what Milton Friedman, the economic adviser to President Ronald Reagan, thought of minimum wage laws:]
The states with the highest minimum wages are primarily in New England and on the West coast. They “tend to be those with very high costs of living, or those that allow ballot initiatives — which enable the voters to cut through gridlock and raise the minimum wage on their own,” Paul Sonn, Legal Co-Director of NELP, told a 24/7 Wall St. reporter in an email.
What is really interesting is that, with the exception of Nevada, the states with the highest minimum wage rates all have strong union representation, the kind of motivating force that gets minimum wage legislation passed, according NELP. High cost of living appears to be another driving force for an increased minimum wage.
The writers at 24/7 Wall St. reviewed minimum wage data by state from NELP to identify some of the states with the highest minimum wage. Median household income values from the U.S. Census Bureau and union membership rates from the Bureau of Labor Statistics was also reviewed.
Minimum wage: $8.00Pct. of workers in unions: 17.5 percent (5th highest)Cost of living: 6th highestMedian household income: $54,459 (14th
On January 1, 2008, California’s minimum wage increased to $8.00, up from $7.50 the previous year. Ten years prior, in 1998, the state’s minimum wage was just $5.15. A bill has been proposed in the state legislature, which would not only raise the minimum wage to $8.50, but would implement automatic increases each year, based on the state’s consumer price index.
Minimum wage: $8.00
Pct. of workers in unions: 14.5 percent (16th highest)
Cost of living: 2nd highest
Median household income: $61,333 (5th highest)
Massachusetts has had a minimum wage of $8.00 since 2008. In March, legislation was introduced to increase the minimum wage to $10.00 by 2013, and the status of that bill is unclear. According to the Missouri Department of Economic Development, the state is has one of the highest costs of living in the country. Massachusetts also has the fifth highest median household income in the country.
Minimum wage: $8.15
Pct. of workers in unions: 11.8 percent (20th highest)
Cost of living: 9th highest
Median household income: $55,942 (12th highest)
“Vermont’s minimum wage increases at the same rate as the Consumer Price Index (CPI) for the preceding year,” the state’s Department of Labor announced. Most recently, on January 1, 2011 this resulted in an increase of 1.1 percent from $8.06 per hour to $8.15 per hour. Vermont has always had a high minimum wage, although a decade ago, in 2001, it was almost two dollars less, at $6.25. The state is expected to announce a rate increase in the next few weeks.
Minimum wage: $8.25
Pct. of workers in unions: 16.7 percent (7th highest)
Cost of living: 3rd highest
Median household income: $66,452 (2nd highest)
With a median household income of $66,452 in 2010, Connecticut is one of the wealthiest states in the country. The state’s minimum wage of $8.25 is among the top five highest minimum wages in the nation. In 2006, when the federal minimum wage was still just $5.15, Connecticut increased its minimum to $7.40, which was at the time the third highest minimum wage in the country.
Minimum wage: $8.25
Pct. of workers in unions: 15.5 percent (12th highest)
Cost of living: 17th lowest
Median household income: $50,761 (21st highest)
Illinois’ minimum wage has historically increased along with the federal rate, until 2004, when the state’s wage was raised to $5.50 per hour, ahead of the national rate of $5.15. The next year, Illinois’ minimum wage increased an entire dollar per hour, and then another dollar in 2008. The minimum wage was raised $0.25 each year since. This year, lawmakers have introduced legislation to raise the minimum wage again, as well as add an annual cost of living adjustment.
(Michael B. Sauter/Becket Adams–24/7 Wall St./The Blaze)