A Raise in the Making: Momentum Toward a Minimum Wage Increase in Two States

Here at Working America, we’ve been closely following the state legislatures in Minnesota and New Mexico. In these states, there’s an effort underway to increase the statewide minimum wage—which would mean a raise for tens of thousands of workers.

Voters in Albuquerque, New Mexico passed a city ordinance increasing the minimum wage by an overwhelming margin last November, and people we talk to across the state think it makes sense to extend an increase for all New Mexicans. Last Monday, the state Senate passed a bill to increase the statewide minimum wage from $7.50 an hour to $8.50, and the state House is considering a similar bill this week.

In Minnesota, the state legislature is starting to consider an increase in the state’s minimum wage, with committee votes expected in the state Senate next week. We’ve found strong support among people we’ve talked to for a higher minimum wage—support that has been reflected in public polling as well.

Last month, in his State of the Union address, President Obama also proposed an increase in the national minimum wage—and additionally said that the minimum wage should be indexed to inflation, so that its value doesn’t erode as it has over the past few years. Obama has proposed an increase from the current $7.25 to $9 an hour, while Sen. Tom Harkin and Rep. George Miller have introduced a bill to set the minimum wage at $10.10 an hour.

There are many myths about minimum wages and their negative effects on the jobs market—hypothetical effects that may make sense in theory but are refuted by a lot of research.

The fact is that we’re not in tough economic times because wages are too high. To the contrary, our economy is being dragged down by a lack of purchasing power among working people. The benefits of economic growth over the past few years have mostly gone to a tiny sliver at the top, while the vast majority of people are seeing wages at a standstill. The share of the economy that is made up by wages is slowly dwindling as the share comprised by corporate profits shoots up. As business journalist Heidi Moore notes, the average CEO is making 231 times what the average worker makes, and this economic inequality is taking a toll on lower-income workers:

Corporate leaders shouldn’t have to be told by the government to pay their workers a living wage. They know that consumers will drive the recovery, but consumption by the rich doesn’t do it. You need the middle and lower classes.
So when those corporate leaders resort to threats to hold workers hostage – citing numbers about how raising the minimum wage by $1.50 will cause them to fire people – they should take a step back and look at some other numbers.
Try this number, for instance: Over one in five American children is living in poverty…There is something truly grotesque about corporate leaders who earn millions of dollars – or even hundreds of thousands of dollars – arguing over paying their workers literally pennies more.

Increasing the minimum wage makes sense for a lot of reasons—it boosts purchasing power, especially among women and minorities, and it helps fight poverty and inequality. And in poll after poll, Americans agree.

So we’re watching legislators in Minnesota and New Mexico, with the hope that they’ll do the right thing and give workers in their states a raise.