"Many entrepreneurs in our state are just now starting to see signs of recovery by hiring and expanding their businesses, and this bill will cause many to halt those plans immediately," said John Kabateck, executive director of the National Federation of Independent Business/California. The group estimated that raising the state minimum wage to $9.25 would lead to the loss of 68,000 California jobs over a 10-year period.
Minimum wage hikes have been popular with voters: Since 1998, proposed increases have been on statewide ballots 10 times in nine states, and all of them were successful. That's one of the reasons Democrats are expected to keep the issue alive for the 2014 midterm elections, when 36 governorships and legislative seats in 46 statehouses will be contested along with U.S. congressional races.
"From an electoral perspective, Democrats want the minimum wage to hang around for a while," said Mike Saltsman, a research director at the Employment Policies Institute, a conservative nonprofit think tank. Saltsman has written op-eds to dispute what his group calls myths about the minimum wage, including that higher wages will reduce poverty and stimulate the economy.
The group also recently ran full-page newspapers ads during the fast food strike, warning that higher wages could prompt more automation. "Why Robots Could Soon Replace Fast Food Workers Demanding a Higher Minimum Wage," the headline in an ad in the Wall Street Journal said. The full-page ad in USA Today showed a touch-screen device replacing a worker.
Saltsman said that protestors' call for a $15 hourly rate is "a bargaining tactic" so that a $10 hourly rate will seem reasonable to voters and policymakers. But increasing the rate from $7.25 to $10 is still a 40 percent bump, he said.
While the institute and national employer groups, like the National Restaurant Association, have been outspoken opponents of a minimum wage hike, some businesses, large and small, have come out in support of higher hourly rates, arguing if workers earn more, they can spend more, namely on their products.
Top officials at Costco and Starbucks both have called for a higher minimum wage. Meanwhile, a poll earlier this spring showed nearly 70 percent of small business owners support raising the minimum wage as a way to help the economy.
Nearly a dozen states this year considered setting a state minimum wage above the federal rate, but besides California, only three did so:
New York raised its minimum hourly rate to $9 from $7.25. The rate will rise to $8 by the end of 2013, $8.75 by the end of 2014, and $9 by the end of 2015.
Connecticut's minimum wage will go to $9 an hour from $8.25, starting with a bump to $8.70 Jan. 1, followed by a second increase on Jan. 1, 2015.
Rhode Island increased its minimum hourly rate to $8 per hour, from $7.75, beginning Jan. 1.
When these laws take effect, 20 states and the District of Columbia will have hourly rates that are higher than the federal minimum.
State lawmakers in New Jersey approved raising the minimum wage to $8.50, but the increase was vetoed by Republican Gov. Chris Christie and then put on this November's ballot for voters to consider. Christie said he supported a higher wage, but opposed including automatic annual adjustments for inflation, known as "indexing."
Ten other states already use indexing: Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont and Washington. In all of them except Vermont, voters approved the measure with the automatic hike.
Christie's Democratic challenger Barbara Buono has criticized him for vetoing the minimum wage increase. "For a working parent making $7.25 an hour, life isn't about living. It's about surviving," Buono, a state senator from Middlesex County, said as part of her economic plan.
New Jersey is one of two states this November that will elect a governor and state lawmakers (Virginia is the other) and the only one with a statewide minimum wage question.
States with Most Minimum Wage Workers
Idaho (7.7 percent)
Texas (7.5 percent)
Oklahoma (7.2 percent)
Louisiana (7.1 percent)
Virginia (6.8 percent)
Source: U.S. Bureau of Labor Statistics
Visit Stateline.org at www.stateline.org
Distributed by MCT Information Services
Original headline: Many states look to raise minimum wage
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