While working families struggle to make ends meet in this sluggish economy, there is a bright spot on the horizon: On Jan. 1, the minimum wage will increase in eight states, raising wages for more than 1.4 million low-wage workers. The increases in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington are a result of state laws that adjust the minimum wage upward each year to keep pace with the rising cost of living.
As a result, individuals who do the hard work of cleaning and securing office buildings, providing day care and serving food will not fall further behind as prices for food, gas and utilities continue to rise. The increase not only helps hard-working men and women provide for their families, but also boosts the overall economy. When Franklin Roosevelt first established the federal minimum wage during the Great Depression in 1938, he emphasized that a strong wage floor is "an essential part of economic recovery." The same is true today.
When low-wage workers have more money in their pockets, they have little choice but to spend it immediately on basic necessities like groceries, clothing and school supplies. And as demand for goods and services grows, businesses expand and hire; the increased spending resulting from the minimum-wage bumps in eight states on Jan. 1 will lead to an additional $366 million in economic output and create the equivalent of more than 3,000 jobs, according to an analysis by the Economic Policy Institute. That's a shot in the arm our economy desperately needs.
The minimum-wage increase is especially important when so many better-paying jobs in sectors like construction, manufacturing and finance have disappeared, and many families are left supporting themselves with lower-paid service-sector jobs. An analysis by the National Employment Law Project finds that while the majority of jobs lost during and after the recession were in mid-wage occupations, roughly three-quarters of the jobs added since job growth resumed are in low-wage occupations.
And things aren't going to improve any time soon: The Bureau of Labor Statistics estimated that seven of the 10 occupations with the most job growth between 2008 and 2018 will be low-paying positions. While we know our economy will have an increasing number of positions in home health care, food preparation and customer service, these jobs don't have to pay poverty wages. At one time, the manufacturing jobs that we now yearn for were dangerous, low-wage and undesirable. But we turned them into good jobs, with safer work places, higher pay, and a voice for workers.
Eight states will take a step in the right direction on Jan. 1 when they raise minimum wage rates to keep pace with inflation. But while more than 1.4 million workers will see their wages increase Jan. 1, millions more must depend on the stagnant federal minimum wage of just $7.25, or $15,000 a year for full-time work. The American people know this isn't right: A national poll conducted in November found that more than two-thirds of Americans support raising the minimum wage to $10 an hour. It's a deeply popular idea that can help boost the economy while not adding to state or federal budget deficits.
It's time for Congress and state legislatures across the country to take a cue from these state leaders and raise and index the minimum wage.
Christine L. Owens is the Executive Director of the National Employment Law Project.