In light of the recent high national rates of inflation, US states are adjusting minimum wages to accommodate rising living costs. On January 1st, 2024, 22 states, including New York and Washington, increased their minimum wages, with some states joining Massachusetts with a minimum wage that reaches or surpasses $15 an hour. Based on analysis conducted by the Economic Policy Institute (EPI), a total of 9 million workers will receive $6.95 billion from the new wage policy, significantly boosting the quality of life for workers.
In addition to increasing minimum wages, states and cities have adjusted parts of their wage policies, aiming to create a more equitable economy. According to the EPI, more than half of the workers receiving the wage boost are women: approximately 57.9%, to be precise. Black and Hispanic workers also benefit significantly from the wage increases, with 9% of Black people in the affected area of the workforce making up 11.1% of the beneficiaries, while 19.6% of Hispanic people in the workforce making up 37.9% of people receiving the wage increase.
Meanwhile, in 2023, Massachusetts pushed the final wage floor increase of $15 per hour. Although it is one of the highest in America, there’s talk of pushing it to $20 per hour.
Advocates say that a minimum wage of $15 is not enough– the cost of living in Massachusetts outweighs earnings. To a single-parent household, $15 an hour is not enough to sustain a comfortable life. Including health insurance and taxes, only $5 an hour is left for other necessary expenses like clothing and food. A living wage calculator by MIT reflects that a household in Massachusetts with one child and one working parent requires a yearly income of $94,790 before taxes. For two adults and one child, it is $80,796.
Minimum wage workers emphasize the need for immediate change. Rob Stevens, a Starbucks Barista, told the WBUR station, “We’re not asking for extra avocado toast and two iPhones a year… We’re saying like, ‘Yo, we’re struggling to live.’” Stevens’ claims are strongly supported by the EPI, who stated in a recent publication that workers “need at least $17 per hour to, at a minimum, meet the cost of living.”
However, data analysts and critics propose a problem with increasing minimum wage. According to Regional Economic Models Inc (REMI), the negatives of increasing the minimum wage in Massachusetts overpower the positives—over time, a raise in minimum wage could lead to a gradual loss of jobs. “It would raise wages for many employed workers, increasing consumer spending and thereby creating additional demand for many in-state businesses,” REMI writes, “however it would also raise labor costs for many businesses, negatively impacting the state’s economic competitiveness and increasing consumer prices.” So while increasing the minimum wage sounds like a good idea at first, in the long run, it may end up harming the economy instead, further pushing minorities and lower-class families into poverty.
