The NCSL Blog

19

By Jackson Brainerd

Voters in five states will vote on minimum wage issues in the wake of increases passed in three states and the District of Columbia during the 2016 legislative sessions.

Dollars and accounting sheetOregon, California, New York, and Washington D.C. legislatively enacted minimum wage increases, with the latter three increasing the rate to an unprecedented $15 per hour (all will be phased in over several years).

Arizona

Proposition 206 would raise the current minimum wage rate of $8.05 to $10 an hour in 2017; it would then increase incrementally to $12 by 2020. The measure would also require employers to provide paid sick leave. Arizona’s minimum wage is currently adjusted for inflation. The bill’s fiscal analysis projects that, if left untouched, the rate would be $8.80 by 2020.

Colorado

Amendment 70 would increase the minimum wage to $9.30 per hour with annual increases of 90 cents each Jan. 1 until it reaches $12 per hour by 2020. The rate would then be annually adjusted based on cost of living, but the amendment would prevent a decrease if cost of living falls.

Currently, Colorado’s minimum wage is $8.31 and that rate is increased or decreased annually based on cost of living (from 2015-2016, it was increased 9 cents, from $8.23). The last time voters approved a minimum wage increase was in 2006.

Maine

Question 4 will raise the current minimum of $7.50 incrementally to $12 by 2020, it would then be adjusted annually based on the Consumer Price Index (CPI).

South Dakota

Referred Law 20 is not meant to alter the standard minimum wage rate, but provide an exception to the minimum wage for employees under age 18. The state passed SB 177 in 2015 to exempt minors from the minimum wage rate, which was raised by initiative from $7.25 per hour to $8.50 in 2014. Referred law 20 is a veto referendum on SB 177.

Washington

Initiative 1433 phases in a minimum wage increase from the current $9.47 to $13.50 by 2020 for employees over age 18. It will then be adjusted annually based on the CPI. Washington’s minimum wage is also currently indexed to the CPI; left to its own devices, the rate is projected to reach $10.28 by 2020.

Opponents of raising the minimum wage argue that it could hurt the very people it wants to help, as some minimum wage workers could see a reduction in hours and benefits or layoffs.

They also argue that it would negatively affect consumers in general if businesses raise prices to compensate for higher labor costs, and that small businesses and rural businesses would have a harder time absorbing increases in costs and may struggle to pay higher wages.

Supporters say the current minimum wage does not cover the basic standards of living, and that higher wages can improve employee productivity and decrease turnover, reducing the costs of hiring and training new employees. They also dispute that it would cause overall job losses, as people would have higher incomes and would provide more demand for products produced by businesses that employ lower-income workers, thus increasing employment.

View the current state minimum wage rates.

Jackson Brainerd is a policy associate in NCSL's Fiscal program.

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This blog offers updates on the National Conference of State Legislatures' research and training, the latest on federalism and the state legislative institution, and posts about state legislators and legislative staff. The blog is edited by NCSL staff and written primarily by NCSL's experts on public policy and the state legislative institution.