CFED Scorecard

CFED Assets & Opportunity Scorecard

Businesses & Jobs
Minimum Wage
Overview

An estimated 30 million Americans hold low-wage jobs. Workers in these jobs struggle to cover their day-to-day expenses, let alone to save for the future. Recognizing that decent wages are critical to financial security, the federal government sets a national minimum wage at $7.25 per hour. However, in many parts of the country, that wage is not enough to make ends meet. In addition, not all workers are covered by federal law. States, however, can set higher minimum wages and extend coverage to additional workers.

What States Can Do

State governments have the authority to increase the minimum wage above the federal $7.25 per hour and extend coverage to classes of workers who are excluded under federal law. In the past couple of years, a handful of states have passed legislation increasing the minimum to $10.00 per hour in yearly increments by 2017, a level many experts believe will increase the financial security of low-wage workers. States can set their state minimum wage to at least $10.00 per hour in 2017 and/or ensure that the minimum wage keeps pace with the rising cost of living by indexing it to inflation. States can also extend full minimum wage coverage to agricultural, domestic and tipped workers.

Strength of State Policies: Minimum Wage

Will state's minimum wage be at least $10 by 2017 or indexed for inflation? 1Are agricultural, domestic and tipped workers covered by state's minimum wage? 3
StateAdequate minimum wage by 2017?Will state's minimum wage be at least $10 in 2017? 2Is state's minimum wage indexed for inflation?All classes of workers covered by state minimum wage?Which workers are excluded?
Alabama 4 No state minimum wage
Alaska 5 No ($9.75) No Agricultural and domestic workers
Arizona No ($8.05) Yes Domestic and tipped workers
Arkansas No ($8.50) No All
California Yes ($10.00) No
Colorado No ($8.23) Yes Domestic and tipped workers
Connecticut Yes ($10.10) No Domestic and tipped workers
Delaware No ($8.25) No All
District of Columbia 6 Yes ($11.50) No Domestic and tipped workers
Florida No ($8.05) Yes All
Georgia No ($5.15) No All
Hawaii 7 No ($9.25) No All
Idaho No ($7.25) No All
Illinois No ($8.25) No All
Indiana No ($7.25) No All
Iowa No ($7.25) No All
Kansas No ($7.25) No All
Kentucky No ($7.25) No All
Louisiana 4 No state minimum wage
Maine No ($7.50) No Agricultural and tipped workers
Maryland 8 No ($9.25) No Agricultural and tipped workers
Massachusetts Yes ($11.00) No Agricultural and tipped workers
Michigan 9 No ($8.90) No Domestic and tipped workers
Minnesota 10 No ($9.50) No Domestic workers
Mississippi 4 No state minimum wage
Missouri No ($7.65) Yes All
Montana No ($8.05) Yes Domestic workers
Nebraska No ($9.00) No All
Nevada 11 No ($8.25) Yes Agricultural and domestic workers
New Hampshire No ($7.25) No All
New Jersey No ($8.38) Yes Domestic and tipped workers
New Mexico No ($7.50) No All
New York No ($9.00) No All
North Carolina No ($7.25) No All
North Dakota No ($7.25) No Domestic and tipped workers
Ohio 12 No ($8.10) Yes Domestic and tipped workers
Oklahoma 13 No ($7.25) No All
Oregon No ($9.25) Yes Agricultural and domestic workers
Pennsylvania No ($7.25) No All
Rhode Island No ($9.60) No Domestic and tipped workers
South Carolina 4 No state minimum wage
South Dakota 14 No ($8.50) Yes Domestic and tipped workers
Tennessee 4 No state minimum wage
Texas No ($7.25) No All
Utah No ($7.25) No All
Vermont 15 Yes ($10.00) No All
Virginia No ($7.25) No All
Washington No ($9.47) Yes Agricultural and domestic workers
West Virginia No ($8.75) No All
Wisconsin No ($7.25) No Domestic and tipped workers
Wyoming No ($5.15) No All

Notes on the Data

1. "State Minimum Wages: 2015 Minimum Wage by State," National Conference of State Legislatures. Accessed: July 16, 2015. Note: "-" indicates that the data is not applicable because the state does not currently have a minimum wage. A state is given credit if it either (1) will have a minimum wage of at least $10 per hour in 2017 or (2) the minimum wage is indexed to inflation.

2. The dollar amount reflected in parentheses will be the state's minimum wage in 2017.

3. Data on domestic and agricultural workers is based on CFED research in August 2015 of states' statutes and administrative codes after consultation from experts at the National Employment Law Project. Tipped worker minimum wage data from "Minimum Wages for Tipped Employees," Department of Labor, Wage and Hour Division. Accessed July 16, 2015. States receive credit for minimum wage coverage if minimum wage is extended to agricultural, domestic and tipped workers.

4. Alabama, Louisiana, Mississippi, South Carolina and Tennessee do not have a minimum wage.

5. Alaska's minimum wage will also be indexed to inflation starting January 1, 2017.

6. The District of Columbia's minimum wage will be indexed to inflation starting July 1, 2017.

7. Hawaii's minimum wage will be $10.10 per hour by January 1, 2018.

8. Maryland's minimum wage will be $10.10 per hour by July 1, 2018.

9. Michigan's minimum wage will be indexed to inflation by January 1, 2019.

10. The minimum wage in Minnesota on August 1, 2016 will be $9.50 per hour but will only be $7.75 for small employers. The state's minimum wage will be indexed to inflation starting January 1, 2018.

11. Nevada's minimum wage rate is $7.25 for workers with employer-provided health insurance.

12. Ohio's minimum wage is $7.25 for employers with gross annual sales of $283,000 or less.

13. Oklahoma's minimum wage is $2.00 for employers that do not have 10 and more employees at any one location or employers that do not have annual gross sales of $100,000.

14. South Dakota voters approved a ballot initiative in 2014 to index its minimum wage to inflation beginning January 1, 2016.

15. Vermont's minimum wage will be indexed to inflation starting January 1, 2019.

How States Are Assessed

A state is given credit for minimum wage adequacy if it either will have a minimum wage of at least $10.00 per hour in 2017 or the minimum wage is indexed to inflation. States receive credit for minimum wage coverage if the minimum wage is extended to agricultural, domestic and tipped workers.

What States Have Done

A growing number of states have recognized the limitations of the federal minimum wage and enacted a higher state minimum wage to match the rising cost of living. As of August 2015, 15 states and D.C. have either adopted policies to have a minimum wage above $10 per hour by 2017 or indexed for inflation. California, Connecticut, Massachusetts, Vermont and the District of Columbia will have a minimum wage of at least $10.00 per hour in 2017. Eleven states index their minimum wages to the cost of living in order to ensure that their value does not erode over time.

Many states have extended minimum wage protections to workers in occupations left vulnerable by the federal law. Thirteen states and the District of Columbia have extended the minimum wage to agricultural workers; four states cover domestic workers and seven cover tipped workers. California is the only state that has extended the minimum wage to all three groups of workers.

Making the Case

Since 2007, CFED has provided tips to help advocates build a campaign to advance asset-building policies. Although the specific policies featured in the Scorecard have changed over the years, the strategies discussed in this section are still applicable and can be used to make the case for a number of related policies.

Guidelines for a Successful Campaign1

1. Convey a clear and consistent message. Advocates for job quality standards should focus communication with the media and policymakers on core messages highlighting the strengths of favored policies. Successful minimum wage campaigns in Missouri repeatedly promoted the message that cost of living indexing simply kept the minimum wage from eroding. Effective paid leave advocates continually reinforce the link between paid sick days and preserving public health.

2.  Tout public support and polling. Although public attitudes on minimum wage and job leave policy vary along geographical and political lines, polling has consistently shown that voters are generally supportive of improving low-wage job quality. Raising the minimum wage is an appealingly, intuitive and easily comprehensible policy. When the question was put to Americans in a national poll in 2006 conducted by CNN, 86% supported increasing the minimum wage. More recently, in a fall 2010 nationwide poll, 67% supported raising the minimum wage to the critical threshold of $10 an hour,2 with support proving resilient in recessionary climates. Three-quarters of the public support a law guaranteeing all workers a minimum number of paid sick days.3 Public sentiment was crucial to Connecticut advocates efforts to enact statewide paid sick days. Voters favored the intensely debated legislation by a better than 2:1 margin, with nearly half of voters “strongly” supporting the bill.4

3.  Turn defense into offense. The fight to defend policy achievements, such as preventing new loopholes after the elimination of minimum wage worker exclusions, presents an opportunity to maintain and grow the advocacy coalitions that first helped enact the policy. Gains in job quality standards will be under constant threat by opponents and other interests. Advocates should use these times as windows to grow their constituencies and renew media attention. Through their many defensive efforts, Missouri Jobs with Justice gained more spokespeople representing a broad spectrum of voices – low-wage workers, pastors and small business owners. These spokespeople are equipped to go to the Capitol to testify at hearings, be quoted in newspapers and speak face to face with legislators.

4.  Utilize relevant scholarship and research. Advocates can buffet the common “job-killing” opposition arguments surrounding job quality standards by effectively deploying relevant research and scholarship. Decades of rigorous empirical research has demonstrated that minimum wage increases do not perpetuate unemployment, but rather grow local economies. Studies on California’s paid family leave policy illustrate that the program has had little to no negative effect on employers.5 Further evidence suggests that a paid-sick-days standard helps businesses reduce turnover and improve worker productivity. Since 2007, when San Francisco’s law took effect, job growth has been consistently higher in the city than in neighboring counties that lack a paid-sick-days law, and the city has experienced stronger employment growth in leisure and hospitality, accommodation and food service – the industries that critics claimed would be most affected by a paid-sick-days law.6

 


1  CFED thanks Tsedeye Gebreselassie of the National Employment Law Project and Donnie Morehouse and Charlie Edelen of Missouri Jobs with Justice for their contributions to this section.

2  Celinda Lake, Daniel Gotoff and Matt Price, memo for Raise the Minimum Wage, June 7 2011, “The Economic Power of and Popular Support for Raising the Minimum Wage,” http://www.raisetheminimumwage.com/sites/nelp2/index.php/pages/lake-research-partners-june-2011-memo-on-raising-the-minimum-wage.

3 Tom Smith and Jibum Kim, Paid Sick Days: Attitudes and Experiences, (Washington, DC: Public Welfare Foundation, 2010),  http://news.uchicago.edu/static/newsengine/pdf/100621.paid.sick.leave.pdf.

4  “Key Findings from Connecticut Statewide Survey,” Anzalone Lizst Research, http://everybodybenefits.org/wp-content/uploads/2011/05/Paid-sick-days-ct-poll-memo.pdf. (Accessed May 27, 2011).

5  Eileen Applebaum and Ruth Milkman, Leaves that Pay: Employer and Worker Experiences with Paid Leave in California, (Washington, DC: Center for Economic and Policy Research, 2011).

6 John Petro, Paid Sick Leave Does Not Harm Business Growth or Job Growth, (Washington, DC: Drum Major Institute, 2010), http://everybodybenefits.org/wp-content/uploads/2011/01/Paid_Sick_Leave_Does_Not_Harm.pdf

Case Studies

Since 2007, CFED has provided case studies that capture detailed stories of noteworthy state policy changes. Although the specific policies featured in the Scorecard have changed over the years, these case studies still serve as instructive lessons drawn from both policy victories and defeats.

Defending Minimum Wage in Missouri (published October 2012)
In Missouri, advocates led by Missouri Jobs with Justice formed Give Missourians a Raise, a campaign to pass a ballot initiative to raise the state minimum wage from $5.15 to $6.50 and index it to an annual cost of living adjustment…Despite the incredible popularity of the minimum wage increase in Missouri, opponents of Missouri’s minimum wage have engaged in a concerted effort each year to weaken the law. Click here to read more.

Paid Sick Leave Laws in DC and Connecticut (published October 2012)
Connecticut and the District of Columbia have led the states in establishing paid sick leave for workers. Advocates and policymakers in both jurisdictions have set a new standard for job quality and security for low-income workers through the passage of paid sick leave legislation. The passage of these laws signals significant progress to ensure earnings and eliminate the risk of job loss during times of illness. Click here to read more.

Acknowledgements

CFED thanks Sara Leberstein from National Employment Law Project for her input and expertise on this policy issue.

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