Pay Raise For Millions: Michigan, 18 Other States Increase Minimum Wage

ALBANY, N.Y. (AP/WWJ) – It will be a happy New Year indeed for millions of the lowest-paid U.S. workers. Nineteen states, including Michigan, New York and California, will ring in the year with an increase in the minimum wage.

An increase passed back in 2014 will gradually raise Michigan’s minimum wage to $9.25 by 2018. In 2017, it will be $8.90, up from $8.50 in 2016.

Massachusetts and Washington state will have the highest new minimum wages in the country, at $11 per hour.

California will raise its wage to $10.50 for businesses with 26 or more employees. New York state is taking a regional approach, with the wage rising to $11 in New York City, to $10.50 for small businesses in the city, $10 in its downstate suburbs and $9.70 elsewhere. Some specific businesses — fast-food restaurants and the smallest New York City businesses — will have slightly different wage requirements.

“This $1.50 increase, I cannot even comprehend or tell you how important this will be,” said Alvin Major, a New York City fast-food worker. The 51-year-old father of four helped lead the fight for the increase in his state, one of several successful efforts by fast-food workers and other low wage workers around the country. “The price of food has gone up. Rent has gone up. Everything has gone up. … This will make a difference for so many people.”

Voters in Arizona, Maine, Colorado and Washington approved increases in this year’s election. Seven other states, Alaska, Florida, Missouri, Montana, New Jersey, Ohio and South Dakota, are automatically raising the wage based on indexing.

The other states seeing increases are Arkansas, Connecticut, Hawaii and Vermont.

Additional increases are slated for later in the year in Oregon, Washington, D.C., and Maryland.

In Arizona, the state Chamber of Commerce and Industry filed a lawsuit challenging the increase, which will raise the minimum wage from $8.05 to $10. On Thursday, the Arizona Supreme Court refused to temporarily block the raise.

Workers and labor advocates argue the increases will help low-wage workers now barely making ends meet and boost the economy by giving some consumers more money to spend. But many business owners opposed the higher wages, saying they would lead to higher prices and greater automation.

Some restaurant owners may consider reducing portion sizes or charging for side dishes that were once included in the price of a meal to absorb the increase, according to Melissa Fleischut, president of the New York State Restaurant Association.

“I’m sure prices will go up where they can, but restaurants want to avoid sticker shock,” she said. “They’re going to have to get creative.”

The adjustments in New York, California and several other states are part of a series of gradual increases to a $12 or $15 hourly wage.

The minimum wage will also go up this weekend in 22 cities and counties, including San Diego, San Jose and Seattle.

The high number of states and localities raising the wage this year reflects the successful work of fast-food workers and organized labor, according to Tsedeye Gebreselassie, senior staff attorney at the National Employment Law Project, as well as federal inaction on the wage. The national minimum was last raised, to $7.25, in 2009.

“These aren’t only teens trying to make some pocket money,” she said. “Increasingly it’s adults who are using this money to support their families.”

It should be noted that if current inflation trends continue, the $9.25 paid to Michigan workers will only be worth about $8.50 by 2018, according to Michigan State University economics professor Charles Ballard. A minimum-wage earner would need to make about $8.00 an hour in 2018 to be making relatively the same as the $7.40 they made in 2013, he said, citing U.S. Bureau of Labor Statistics data.

___

This story has been corrected to indicate California’s minimum wage will rise to $10.50 for larger companies, instead of $10 overall.

TM and © Copyright 2016 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2016 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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