During a White House briefing at SAF’s Congressional Action Days last month, Rachel Martin of Ballard Blossom told a White House expert on labor that Seattle’s phased-in $15 minimum wage law has created a lot of confusion.
When California Governor Jerry Brown recently signed legislation to increase the state’s minimum wage to $15 per hour by 2022 for some businesses, he joined a growing number of state lawmakers pushing for higher wages.
California’s phase-in will begin next year when the rate increases to $10.50 an hour from $10 an hour. The law increases the minimum wage to $15 per hour by 2022 for businesses with more than 25 employees and by 2023 for smaller firms.
Lawmakers in New York, Massachusetts and Vermont have made similar overtures, signaling that “a move once considered radical is slowly becoming law,” at the state level, said Shawn McBurney, the Society of American Florists’ senior director of government relations.
“For years, Democrats in Washington have pressed for increases to the federal minimum wage; however, in the last few years the minimum wage issue has shifted from the federal level to the state and local level,” he said.
The last federal wage increase occurred in 2007 when Congress established the current federal rate of $7.25 per hour that went into effect in 2009. During his 2014 State of the Union address, President Obama called for an increase in the minimum wage to $10.10 per hour by by this year.
In 2014, fewer than half of the states had minimum wage rates that exceeded the federal level. Today, 29 states and the District of Columbia have rates that exceed the federal level and many of them included increases indexed to inflation. In addition to the states which have higher minimum wage rates than the federal government, more than 30 localities have mandated higher minimum wage levels within their jurisdictions that exceed the federal and their own state levels.
“While the minimum wage debate has historically been about the lowest rate an employer can pay by law, the debate is changing a bit,” McBurney said. “Now that the number of localities that have increased their minimum wage rates has proliferated, a new debate has started about whether localities should even be allowed to raise their rates above their state’s level.”
The conversation surrounding minimum wage at both the state and federal level is complex, McBurney said, and it benefits from the real-world perspective offered by business owners.
During a White House briefing at SAF’s Congressional Action Days last month, for example, Rachel Martin of Ballard Blossom in Seattle pushed back against the notion that higher wages lead to increased consumer spending, after Ben Olinsky, special assistant to the president for labor and workforce policy, discussed President Obama’s decision to raise the minimum wage for all federal contract workers.
“Seattle has already enacted a phased-in $15 minimum wage requirement,” she explained. “The law is confusing about how much you have to pay depending on the benefits you offer. The $15 minimum wage also doesn’t actually go into effect until several years from now; however, it has caused a lot of confusion because many job applicants don’t understand that , and think they should be paid $15 now.”
Other examples can be found around the country, McBurney said, pointing to New York State, where state lawmakers recently approved a $15 hourly wage in New York City by 2019 for businesses with 11 or more employees and by 2020 for others. New York suburbs would reach $15 in 2022. Minimum pay in upstate New York would climb to $12.50 an hour in 2021, then rise based on a formula until it reaches $15 per hour.
In addition, presidential candidate and former Secretary of State Hillary Clinton supports an increase of the minimum wage to $12 per hour while presidential candidate Sen. Bernie Sanders (I-Vermont) has called for an increase to $15 per hour. Sen. Elizabeth Warren (D-Massachusetts) has stated that a federal minimum wage of $22 may be justified.
McBurney also noted the situation in Birmingham, Alabama, where the city council passed an ordinance in August of 2015 that would have raised the minimum wage in the city to $8.50 an hour starting July 1, 2016 and $10.10 an hour the next year.
“The state of Alabama has no minimum wage of its own so businesses must comply with the $7.25 per hour mandated by the federal government,” he said.
The move by Birmingham attracted opposition in the state legislature. Legislation was introduced and swiftly passed in the state house that pre-empted the ability of Alabama cities, including Birmingham, to set wage levels or benefits for private employers “not required by state or federal law.”
Members of the Birmingham City Council have vowed to continue to press for an increase in their city.
