24/7 Wall St.: The White House recently announced President Barack Obama’s support for a Senate bill that would increase the federal minimum wage to $10.10 an hour. While it remains to be seen whether the bill will make it through Congress, many states are not waiting to take action.
Five states have passed measures to raise the minimum wage this year, according to data published by the National Conference of State Legislators. Only one of these states, California, has passed a bill that would raise the minimum wage to $10 per hour. Based on data from the U.S. Department of Labor, 24/7 Wall St. identified the states with the highest minimum wages.
Whether or not a higher minimum wage is good for the economy continues to be the subject of debate. The National Employment Law Project (NELP), which advocates raising the minimum wage, maintains that the decline in the purchasing power of the minimum wage “has contributed to the growth of income inequality over the past three decades.”
Other groups maintain that raising the minimum wage is bad for business and jobs. The Heritage Foundation notes that if the United States raises the minimum wage to $10.10 an hour, the combined costs of wages, employer penalties for not paying health insurance and taxes “would raise the minimum cost of hiring a full-time worker to $12.71 per hour.”
24/7 Wall St. A state’s cost of living may influence its minimum wage. The cost of living in six of the eight states with a minimum wage over $8 an hour is higher than the nationwide cost of living. In Connecticut, where the minimum wage is currently $8.25, the cost of living is the fourth highest in the nation. The cost of living is similarly high in California, Massachusetts and Vermont.
Another factor keeping the minimum wage high in these states likely involves labor representation. Among these eight states, only Nevada is a “right to work state,” meaning workers cannot be required to join a union or pay for a union’s costs as a condition of employment.
Many states where current minimum wages are among the nation’s highest also have high union membership. In Washington, which currently has the nation’s highest minimum wage, 18.5% of workers are union members, fourth highest nationally. Among private sector workers, five of the eight states had among the 10 highest union membership.
Based on information provided by the U.S. Department of Labor, 24/7 Wall St. identified the eight states with a minimum wage above $8 per hour. Additional figures on the cost of living in various states are from the Missouri Economic Research and Information Center (MERIC). Data on union membership by state are from the Union Membership and Coverage Database for 2012. Figures on poverty, income and income inequality as of 2012 are from the Census Bureau’s American Community Survey. Unemployment rates are as of October 2013, from the Bureau of Labor Statistics.
These are the eight states with the highest minimum wages, according to 24/7 Wall St.: