Minimum wage hikes in 18 states set for new year

The lowest wage workers in 18 states will get a boost in their paychecks starting on New Year's Day, as minimum wage hikes take effect.

Many of the wage hikes are phased-in steps toward an ultimately higher wage, the product of ballot initiatives pushed by unions and workers rights groups over the last few years.

The minimum wage in Washington state will rise to $11.50 an hour, up 50 cents and the highest statewide minimum in the nation. Over the next three years, the wage will rise to $13.50 an hour, thanks to a ballot measure approved by voters in 2016.

Mainers will see their minimum wages rise the most, from $9 an hour to $10 an hour, an 11 percent increase. Voters approved a ballot measure in 2016 that will eventually raise the wage to $12 an hour by 2020.

Arizona, California, Colorado, Hawaii, New York, Rhode Island and Vermont will see their minimum wages increase by at least 50 cents an hour. Smaller increases take effect in Alaska, Florida, Michigan, Minnesota, Missouri, Montana, New Jersey, Ohio and South Dakota.

Jared Bernstein, a former chief economic advisor to Vice President Joe Biden and a senior fellow at the Center on Budget and Policy Priorities, said states have been more willing to raise minimum wages because those who take low-wage jobs are more likely to be better educated now than they were in the past, a sign of an economy where fewer high-wage jobs are available.

"As the population of low wage workers has become a bit more upscale, many places are willing to adjust their minimum wages, especially given the pervasive research that supports moderate increases," Bernstein said in an interview. "States and localities have been increasingly willing to raise their own minimum wages as the federal value has been stuck at $7.25."

Several big cities will see significant increases in the minimum wage starting in the new year, a legacy, observers said, of the Fight for 15 campaign spearheaded by the Service Employees International Union in recent years.

California localities are especially likely to see big boosts: The lowest-paid workers in Mountain View and Sunnyvale, Calif., will get $2 an hour increases, to $15 an hour. Workers in Cupertino, El Cerrito, Los Altos, Palo Alto, San Jose and San Mateo will all see their wages rise to at least $13.50 an hour.

Minimum wages will jump to $15.64 in SeaTac, Wash., home of Seattle's international airport, and to $15.45 in Seattle. Wages are also set to rise in Minneapolis, Albuquerque and Flagstaff, Ariz.

Michael Saltsman, the managing director at the business-backed Employment Policies Institute, said the growing trend of city-specific minimum wages — a phenomenon only about a decade old — can create headaches for small employers, and even lead to business closures.

"Generally, it's shown that if you raise the minimum wage, you tend to see reductions in hours for younger employees," Saltsman said.

Both Saltsman and Bernstein pointed to states that prohibit localities from raising minimum wages beyond the state-set standard. In recent years, Iowa and Missouri have joined 23 other states in adopting so-called preemption laws, and other states are likely to introduce their own preemption measures in upcoming legislative sessions.

"What you see ... are states trying to impose preemption on their localities, disallowing increases, essentially doing the bidding of low-wage employers and trying to block such initiatives," Bernstein said.

"States are understanding that regardless of where you stand on the merits of raising the minimum wage, having a state standard rather than a patchwork of local laws is better," Saltsman said. 

Supporters of a higher minimum wage are beginning to circulate petitions in Massachusetts, Michigan, Missouri and Ohio, in hopes of securing a spot on the 2018 ballot. Legislatures in Massachusetts and Connecticut are likely to consider minimum wage hikes, too.