Building an Economy that Works for Everyone

More states follow Washington’s lead to protect and increase minimum wage

Logo for the successful 1998 campaign to raise Washington’s minimum wage

At $8.55 per hour, Washington state has the best minimum wage in the nation. This honor is due, in large part, to an overwhelming majority (66%) of Washington voters who approved Initiative 688 in 1998.

Initiative 688 raised Washington’s minimum wage to $6.50 per hour in 2000, and now provides for annual cost-of-living adjustments tied to inflation. Since its passage, Initiative 688 has made adjustments to the minimum wage a predictable process that  no longer subject to the whims of politicians and business lobbyists (well, almost).

The success of Washington’s minimum wage attracted attention across the country. Ten other states now index their minimum wage to inflation, and two more – Massachusetts and Maryland – are pushing similar measures this year.

In Massachusetts, a push to increase the minimum wage from $8/hour – established in 2008 – is now underway. Proponents are pushing to index it to inflation, noting that in Massachusetts, a minimum-wage worker makes just $16,640 per year.

In Maryland, a group of concerned businesses owners are rallying to support an increase in Maryland’s minimum wage, currently set at just $7.25/hour. A statement from The Business For a Fair Minimum Wage coalition reads: “A higher minimum wage makes good sense for our Maryland economy. It puts money in the hands of the people who will put it right back into local businesses, buying needed goods and services.”

These campaigns are running into stiff opposition from small but loud business lobbyists who, just like Washington’s I-688 campaign, are using the same scare tactics – ‘job-killer!’ – in an attempt to sink the campaigns. The problem with that is simple: it’s a lie.

As the New York Times recently pointed out (backed up by hard data and research):

…we know now that the [‘job-killer’] argument is grossly overstated. Over the past 15 years, states and cities around the country have rushed ahead of the federal government to impose higher minimum wages. Economists analyzing the impact of the increases on jobs have concluded that moderate increases have no discernible impact on joblessness. Employers did not rush off to cheaper labor markets in the suburbs or across state lines for a simple reason: that costs money too.

Put simply, a strong minimum wage and annual cost-of-living adjustments help insulate the minimum wage from political pressure, protects low-wage workers, and actually boosts the economy by improving consumer spending power.

In 2011, a full-time worker earning minimum wage in Washington state will earn about $18,033 annually (at 2080 hours/year) – $2,953 more than workers earning the federal minimum. Higher wages mean people have more money to spend, which is a boon for all businesses and our local economies.

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