The minimum wage is about to get a little better.
Or at least in eight states which have announced plans to increase the state minimum wage. The states include Colorado, Montana, Ohio, Oregon, Washington, Arizona, Florida and Vermont. The first five have already announced the specifics of the minimum wage increase, while the last three will do the same in the coming weeks
The hike is highest in Washington state, which is seeing a rise in $0.37 to result in a minimum wage of $9.04. According to CNN Money, the changes are being made to comply with laws that require states to keep pace with inflation. Lower than the five states that have announced their plans, the federal minimum wage stands as it has since 2009 at $7.25, which translates to $15,000 a year for a full-time worker. That represents a figure below the poverty rate.
As The Huffington Post reports, Washington's bump will make it the first state to peg its minimum wage above $9. The rise to $9.04 a year will result in an additional $770 per year for a full-time minimum wage worker. In speaking to HuffPost, analysts are crediting Washington's 1998 initiative to peg minimum wage to the national Consumer Price Index. The idea is that fluctuations in wages will be dictated by inflation.
"At least these low-wage earners will maintain their purchasing power and go purchase things," said Jeff Johnson, president of the Washington State Labor Council, an affiliation of unions and labor groups, who wrote the Washington initiative. "The money will go right back into the economy," he told HuffPost.
But the model may have unintended consequences, according to a report from The Daily Telegraph. Studying recent minimum wage hikes in the United Kingdom, the Telegraph cites work from the Low Pay Commission which notes an adverse impact on youth workers. The findings should be applied universally and are not exclusive to the British labor sector.
"We don't know what the minimum wage effect is in isolation from the recession effect," Tim Butcher, the commission's chief economist told the Telegraph. "We do know recessions affect young people as employers operate first-in, first-out and look for people with experience."
The report was released as the United Kingdom readies minimum wage hikes. Taking effect this past weekend, the minimum wage for 18-to-20-year-olds is now £4.98, up from £4.92. For 16-to-17-year-olds, the new rate is £3.68, up from £3.64.
Official stats showed that roughly 1 million of the 2.5 million people officially counted as unemployed in the U.K. are between the ages of 16 and 24.
The commission said it was planning on taking a closer look at the direct link between minimum wage policy and youth unemployment.
According to the National Employment Law Project, the announced U.S. wage hikes are as follows:
1. Colorado: +$0.30 to $7.64
2. Montana: +$0.28 to $7.65
3. Ohio: +$0.30 to $7.70
4. Oregon: +$0.30 to $8.80
5. Washington +$0.37 to $9.04
8 States With Highest Minimum Wage
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