January has been rough. COVID-19 infections spiked, consumer prices surged and Congress has been unable to pass a new economic relief package that would extend monthly child tax credits and provide paid leave for workers.
But here’s a bit of good news: Millions of low-paid workers just got a raise.
Twenty-one states and 35 municipalities hiked their minimum wages in January, according to the National Employment Law Project. Another four states will do so later this year. That’s a record number, with roughly half providing workers at least $15 an hour — a figure that labor activists have long argued is the lowest livable wage. This month’s raises range from 22 cents an hour in Michigan to $1.50 an hour in Virginia.
It’s hard to tell how many workers will see their paychecks grow, considering the current volatile job market, says Julia Wolfe, a state economic analyst for the Economic Policy Institute. But roughly 39 million people — 28% of the workforce — earned less than $15 dollars an hour in 2019, before the pandemic hit.
Black women and Latinas made up the largest share of this group. That’s why minimum-wage hikes tend to benefit women of color the most, particularly those in the service economy, said Wolfe.
“Lots of these workers, we think of as front-line workers and essential workers,” said Wolfe, whose organization supports the Raise the Wage Act, which would raise the federal minimum wage to $15 an hour by 2024.
While the recent pay raises are reason to celebrate, Wolfe said, relying on cities and states to provide workers with a living wage excludes too many people. She points out that only four of the 14 Southern states have raised the minimum wage above the federal minimum of $7.25 an hour. Mississippi, West Virginia and Arkansas had the highest share of workers earning less than $15 an hour before the pandemic.
“There’s a long history of anti-Black racism that’s really woven into the policy landscape there,” Wolfe said. “This is certainly no exception.”
Democrats in Congress have tried to raise the federal minimum wage for years. They’ve introduced the Raise the Wage Act four years in a row, with the House passing it once. But it doesn’t have enough support from moderate Democrats in the Senate.
President Joe Biden, who campaigned on raising the federal minimum wage, has taken other measures instead.
By the end of January, all federal civilian employees will make at least $15 an hour, raising pay for 67,000 workers across the country, according to the Office of Personnel Management. Biden also ordered companies that sign new contracts with the federal government to guarantee employees the same.
The departments of agriculture, defense and veterans’ affairs employ most of the people who earn less than $15 per hour. They include rural firefighters, plant inspectors and janitors at hospitals that serve military veterans.
Employees for the U.S. Postal Service and Postal Regulatory Commission are not covered by the changes, as those agencies operate independently from the executive branch.
Meanwhile, the pay increases that went into effect this month will have a huge impact on the lowest-paid workers in those states. In Virginia, full-time minimum wage workers will get an extra $3,000 per year. The lowest-paid workers in Delaware, Illinois, New Mexico, New Jersey and California will get more than $2,000. Seattle now has one of the highest minimum wages in the country: $17.27 for most employees.
Voters in several states may force companies later this year to pay even more. Minimum-wage increases could be on the ballot in Nebraska, Idaho and California during November’s midterm elections.
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