The minimum wage will increase in these 21 states, 35 localities in 2022
It was the year when low-wage workers finally gained significant bargaining power and used it to push for big pay increases.
But that does not prevent many states and cities from making at least some of these advances in law.
Twenty-one states and 35 cities and counties are set to raise their minimum wages on or around New Years Day, according to a report provided exclusively to USA TODAY by the National Employment Law Project (NELP), a workers’ rights group.
Base hourly wages will drop from $ 11 to $ 12 in Illinois; from $ 9.25 to $ 10.50 in Delaware; from $ 9.50 to $ 11 in Virginia; $ 12 to $ 13 for most New Jersey workers; and $ 10.50 to $ 11.50 in New Mexico.
As some governments act later in the year, a total of 25 states and 56 localities – a record 81 jurisdictions – will raise their compensation floors sometime in 2022, according to NELP.
A base salary of $ 15 an hour or more, ridiculed as the pipe dream of fast food strikers just a few years ago, is becoming commonplace. The California minimum will hit $ 15 for the first time on Jan. 1 for large employers. New York State – already at $ 15 in New York and for fast food workers statewide – will extend that benchmark to Long Island and Westchester County on New Years Eve.
Four of the communities that raise their compensation floors on Jan. 1 will first hit the $ 15 threshold: Denver, which drops from $ 14.77 to $ 15.87, and the California cities of San Diego, Oakland and West Hollywood .
Another 27 cities and towns already at $ 15 will climb even higher in a few weeks, as Mountain View and Sunnyvale in California both hit $ 17.10 and Seattle $ 17.27 for most employers.
Minimum wage in Oakland
In Oakland, 23-year-old Evelia Domingo works full-time at a local Jack in the Box, earning the city’s hourly minimum of $ 14.36. She lives in a two-bedroom apartment with her father and two sisters, sharing the monthly household expenses of $ 3,000 with her father, a construction worker.
Although they can pay the bills, Domingo says she has no money for discretionary expenses such as dining out.
“I would love to go out and take my family out, but I can’t because I don’t have enough money for anything other than household expenses,” she said via an interpreter. “I don’t like shopping because I see things I want but can’t afford.”
On New Years Day, Oakland’s base salary will increase to $ 15.06, earning Domingo $ 112 more per month. She plans to give the money to her father to cover the electricity and water bills so that he can send more money to Domingo’s mother, who is ill and lives in Guatemala. The slightly higher paycheck could also help the family save money to eventually move to a larger apartment.
“I want to be able to help if I can,” she said.
But there will be no frills. Domingo says she would need an extra $ 5 an hour pay raise to afford other things she would like to do, like saving for a car, helping her sister go to college, going out and buy clothes. “Everything seems impossible,” she said.
Yannet Lathrop, researcher and policy analyst at NELP, says $ 15 only provides a living wage in much of the country.
“This becomes the minimum by default”, she said.
This may not be the case in the United States, but it is in many higher cost regions.
Where is the minimum wage of $ 15?
Besides California and New York, nine states are heading towards a base salary of $ 15 over the next four years – Connecticut, Delaware, Florida, Illinois, Maryland, Massachusetts, New Jersey, Rhode Island and Virginia. They will join 50 locations at or on the $ 15 path, including Chicago, Minneapolis and Washington, DC
In total, by 2026, about 40% of the U.S. workforce will be covered by minimum wage mandates of $ 15, according to NELP figures.
Separately, at least a hundred large companies, for the most part, have already raised their minimum wages to $ 15 or more, including Best Buy, Costco, Wayfair, The Container Store and Southwest Airlines, according to the NELP study.
Lathrop traces the $ 15 move to Fight for $ 15, an alliance of fast food restaurants and other low-wage workers that has staged walkouts across the country since 2012 and is supported by the Service Employees International Union.
“This is the result of this organization,” she said.
Power passes to workers
Then there are the ripple effects of COVID-19.
The workforce shortages linked to the pandemic have given American workers unprecedented leverage. Several million Americans are left on the sidelines because they cannot find or afford child care, are afraid of contracting COVID, or they are still living off improved unemployment benefits or stimulus checks. government. And many older people have taken early retirement.
Employers, in turn, dramatically increase wages to attract and retain workers amid the reopening of the economy and strong consumer demand. In October, there were 11 million job vacancies and 4.2 million people quit, usually to take other higher-paying positions, according to figures from the Labor Ministry. Both totals are close to records.
In November, wages were up 3.7% overall from a year earlier, the highest since 2009, and wages for the bottom quartile of employees jumped 5.1%, the largest gain in nearly two decades, according to the Atlanta Fed’s wage growth tracker. The average hourly wage of restaurant and bar workers jumped 12.1% in October, the highest on record, to $ 17.66, according to the Department of Labor.
The new bargaining power of workers has encouraged many people to play hard. The country has seen an increase in strikes this fall at companies such as John Deere, Kellogg and Kaiser Permanente, with many workers getting higher wages and benefits.
The pro-worker landscape has softened the impact of minimum wage increases as most employee incomes are already near or above the new pay floors, said Mark Zandi, chief economist at Moody’s Analytics.
Federal minimum wage remains at $ 7.25
Lathrop, however, says government-mandated increases are still key to helping low-income households meet their spending, especially with inflation reaching a 39-year high last month.
“At some point we will come back to an economy where workers have no influence and we will have to rely on the laws,” she said. “It would not be a good policy to leave the wage floors to the discretion of the private sector. “
The federal minimum wage, however, has been stuck at $ 7.25 an hour since 2009, with Senate Republicans repeatedly blocking efforts to raise it.
Although 30 states with more than 60% of the U.S. workforce now have higher wage floors than the federal government, 20 states – mostly in the South and Midwest – rely on the federal minimum and are unlikely to set a higher base, says Lathrop. This has heightened the need for federal action, she said.
Many employers, however, say the minimum wage increases will add to cost pressures triggered by worker shortages and supply chain bottlenecks that have delayed product deliveries.
“In today’s environment, where employers are trying to cut costs by taking the workforce out of the restaurant, the last thing you want to do is give them another incentive to do it,” says Michael Saltsman, manager. General of the Employment Policies Institute, which is supported by the restaurant industry.
Salary increases, he says, will accelerate a trend towards more automation and fewer workers.
A 2019 Congressional Budget Office study found that a federal minimum wage of $ 15 would raise the wages of 17 million workers earning less than that and perhaps another 10 million earning a little more. This would result in the loss of 1.3 million other workers, according to the study’s median estimate.
Not all base salary increases that take effect next month will be material. A handful of states and 27 localities will enact small annual increases in the cost of living. Compensation floors will drop from $ 12.32 to $ 12. 56 in Colorado, $ 8.80 to $ 9.30 in Ohio, and $ 8.75 to $ 9.20 in Montana.
Later in 2022, four more states and 22 cities and counties will increase their minimum wages. Connecticut will drop from $ 13 to $ 14 on July 1, and Florida’s from $ 10 to $ 11 on September 30. Many cities like Los Angeles and Tucson, Ariz. Will increase base wages more modestly to offset the higher cost of living.