Building an Economy that Works for Everyone

Washington’s best-in-the-nation minimum wage protects paychecks, boosts economy

On January 1st, Washington’s minimum wage will increase by 37 cents to $9.04 per hour, in line with a voter-approved law that provides for raising the minimum wage as the cost-of-living goes up. That bump – making Washington’s the best state minimum wage in the nation – will help increase consumer spending at local businesses and protect jobs that are critical to economic recovery.

“A strong minimum wage is especially important for Washington’s working people, families and economy, since low-wage positions are projected to add significantly more jobs than high-wage occupations in the coming years,” said Marilyn Watkins, Policy Director at the Economic Opportunity Institute.

The Washington State Employment Security Department recently projected the top twenty occupations expected to have the greatest increases in employment numbers between 2008 and 2018. Of those twenty occupations, more than half are low-wage positions.

“The increase in Washington state’s minimum wage to $9.04 on January 1, 2012 is the best economic news we have had for workers in low wage jobs in two years,” said Jeff Johnson, president of the Washington State Labor Council. “This increase will keep many workers out of poverty and keep stores open on Main Street.”

While critics of the minimum wage point to older research to back up their dire economic claims, the newer, more sophisticated studies show minimum wage increases have no statistically significant effect on employment. Research also shows that raising the minimum wage increases the income of low-wage workers and leads to reduced turnover, which means employers spend less on hiring and training new employees.

But even a strong minimum wage is not enough to live on. In 2011, a full-time minimum wage worker in Washington will earn just over $18,000/year. Although enough to keep the family of three above the federal poverty threshold, it is not enough to cover basic daily expenses – such as transportation, childcare and housing – in most areas of Washington state.

Washington’s law, passed in 1998 by a two-thirds majority of Washington voters, raised the minimum wage and tied all future adjustments to cost of living increases. Seven other states – Colorado, Montana, Ohio, Oregon, Arizona, Florida and Vermont – will also increase their minimum wage on January 1st.

A full analysis of Washington’s minimum wage increase titled “Washington’s minimum wage standard: Protecting workers and families during tough economic times” is available online.

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