Efforts by New York and California to raise their minimum wage to $15 an hour are encouraging, but the US government needs to increase the federal minimum wage as well, the US deputy labor secretary, Chris Lu, said on Friday.
“While we are encouraged by what is happening around the country, we still need to raise the federal minimum wage, which is an important floor particularly for the states for which there is no state minimum wage,” Lu told the Guardian.
The California state government has recently passed legislation that would gradually increase its minimum wage each year until it reaches $15 an hour by 2022. Governor Jerry Brown is expected to sign the bill into law on Monday. Similarly, the New York state legislature has agreed to raise its minimum wage to $15 an hour as well. In New York City, the minimum wage will reach $15 an hour by 2018. Other areas of New York like Westchester and Long Island have until 2022.
Barack Obama wants to increase the federal minimum wage, pointed out Lu, “but in the absence of congressional action, he has been supportive of states like California and New York that are raising their wages”.
The increase to $15 an hour will “have a meaningful difference in people’s lives”, he said. “The California minimum wage for instance will lead to an increase for 5.6 million people in California. That’s significant from a wage increase standpoint.”
On Friday, the Department of Labor revealed that US hourly wages have grown by just 2.3% over the past year. In order for low-income Americans to feel the impact of the US economic recovery, the wage growth would have to be between 3% to 4%, according to the left-leaning Economic Policy Institute.
“Since the president called for an increase in minimum wage in the State of the Union 2013, 18 states have raised their minimum wage so we are very encouraged by what is happening,” pointed out Lu. “Not only states, but cities as well have taken the lead on this action.”
Not all efforts to raise the minimum wage have gone over well. After Birmingham, Alabama passed a city ordinance attempting to raise its minimum wage to $10.10, the state senate passed a bill that stripped Alabama cities of their ability to set hourly pay requirements.
Alabama has no state minimum wage. It is one of the states described by Lu that use the federal minimum of $7.25. The federal minimum wage has been $7.25 an hour since July 2009. An American working full time – 40 hours a week, 52 weeks a year – at that wage would earn about $15,080 a year.
Friday also marked 25 years since the last adjustment to the federal minimum wage for tipped workers. Back in 1991, the hourly wage was bumped to $2.13 from $2.09. In number of states, employees who rely on tips – like servers – are still paid just $2.13.
The Obama administration supports the Raise the Wage Act, which in addition to raising the federal minimum wage to $12 by 2020 would also weed out tipped minimum wage over that time period. The bill was introduced in Congress last year and has yet to come up for a vote.
“That’s a key part of the next step for the minimum wage, to make sure that it really is a wage floor for all workers, including tipped workers” said Heidi Shierholz, the chief economist at the Department of Labor.
