Minimum Wage Legislation on the Horizon

The recession has ended but many American households still don’t feel so. As of today, there are millions of Americans who are living below the poverty line. In 2007, only 12.5% of all Americans lived in poverty but the rate has risen to almost 19% this year. Employees started receiving lower wages earlier this year, even those with advanced degrees.

We may have observed that the government has been economically productive but American workers still do not see their wages increase. In fact, if their wage is not stagnant, it declines. This issue poses as a challenge to the economy. Most believe that the pay scale issue is the reason why there is an overall income inequality.

While the wages of 37 states declined by 0.1%, 13 states controlled by democrats recently raised their minimum wage by 0.9%, 5 states through legislation and 8 states through inflation indexing. In 2021, Seattle is expecting to have a minimum wage of $15 by gradually increasing their minimum wage. On the other hand, California is currently working on their California Minimum Wage Increase Initiative for the purpose of raising the minimum wage to $12 per hour by 2016. It is the only large state that can place a minimum wage initiative on November 2014. Other smaller states who attempt to vote for higher increased wages include Alaska, Arkansas, Illinois, Nebraska and South Dakota.

Conservatives do not like the change, arguing that it will result in reduced job growth. But Jared Bernstein, the former chief economist for Vice President Joe Biden, concluded that there is 1.8% job growth in states where minimum wages were raised. As a result, unemployment rate declined to -1.2%. Bernstein admits that these are just small changes. However, they prove that minimum wage hike is not the reason for reduced job growth. Most importantly, the senate could soon vote for the increase of national minimum wage. The election is pending, and decisions will come down on not only the minimum wage issue, but also the legislators that will make the difference in the decision.

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