States Take The Lead On Minimum Wage

While Congress is unlikely to pass an increase in the federal minimum wage this year, four states – Delaware, Massachusetts, Rhode Island and Vermont — seized the initiative in 1999 and voted to increase their wage rates.

Massachusetts and Vermont already demanded employers pay their workers more than the current federal minimum of .15/hour.

Rhode Island and Delaware, where rates were $5.15 and $5.00 respectively, approved increases this year that lift their rate above the federal standard. Rhode Island’s minimum wage is now $5.65 and, in Delaware, the rate rose to $5.65 this year and will hit $6.15 on October 1, 2000.

With the addition of Rhode Island and Delaware, the number of states with wage floors higher than the federal level has risen to 10. The District of Columbia automatically sets its rate $1.00 above the federal.

It is not uncommon for states — primarily on the eastern and western edges of the country — to outpace the federal government on the minimum wage.

According to some analysts, a groundswell at the state level often leads to action in Congress.

“I think states tend to be leaders on these issues,” said Cheye Calvo of the National Conference of State Legislatures. “The Congress does tend to act later.”

Between 1981 to 1990, while the federal minimum held steady, states began to hike their rates above the level set by Congress. By 1991, 12 states ordered employers to pay more.

Although support for a higher minimum wage divides Congress along party lines with Democrats generally for it and Republicans against, in some states the partisan divide is less predictable.

Massachusetts’ Republican governor, Paul Cellucci, supported a minimum wage increase, but for two years, the Democratic speaker of the house, Thomas Finneran, opposed it. The measure finally passed when Finneran unexpectedly and suddenly changed his mind.

Delaware’s wage hike would not have passed without the approval of its Republican-controlled House.

Rhode Island’s Republican Governor, Lincoln Almond, also agreed to his state’s minimum wage increase.

At the state level, analysts say, a fear of competition from neighbors complicates the issue. Lawmakers, both Democrat and Republican, fear wage laws will drive potential employers elsewhere.

In three states, California, Oregon and Washington, lawmakers had little to do with the wage increases. Voters approved the higher pay by ballot initiative.

All of the states with higher wage rates do share one thing in common: a cost of living higher than the national average. Alaska and Hawaii, where prices dramatically exceed those in the lower 48, demand employers pay more than the federal minimum.

Alaska automatically sets its rate $.50 above the federal. In Hawaii, employers must pay at least $5.25.

In California, the rate is .75/hour; in Connecticut, it is $5.65 now and will rise to $6.15 on January 1; Oregon’s minimum wage is $6.50. Washington, where workers make at least .70/hour now, will see an increase to $6.50 on January 1.

In 2001, Washington will become the first state to tag its minimum wage rate to the rate of inflation, essentially guaranteeing annual raises.

Massachusetts’ minimum wage will rise from $5.25 to $6.00 on January 1, and to $6.75 a year after that. Vermont has raised its floor from $5.25 to $5.75.

The majority of states, particularly those in the Midwest and Mid-Atlantic, have pegged their minimum wage rate to the federal.

Seven states, six of which are in the south, have no state minimum wage law. Another seven, including New York, have rates below the federal level.

The federal minimum applies to most workers, unless the state wage is higher. Federal law, however, does exempt migrant farm workers and seasonal employees, among others, and, in many states, these workers earn far less than the minimum.

Last week, the Senate approved the first federal increase in the minimum wage since 1996, voting to boost it in three steps to $6.15 over the next three years. The House has taken up a similar measure.

President Clinton has threatened to veto the Senate bill, but analysts predict the Congress will pass a minimum wage increase in 2000.