January 1, 2013 in Business

Minimum wage gap between states grows wider today

Associated Press
 

OLYMPIA – With a bump in the Washington state minimum wage to $9.19 an hour, high school student Miranda Olson will edge closer to her goal of buying the black Volkswagen Beetle she’s been researching online.

Olson is only able to pick up part-time hours working at a cafe after classes and on weekends. But the extra pennies she’ll earn in 2013 will add up over the coming weeks and months.

“It’s not much, but it’s something,” said Olson, 16, who works at Wagner’s European Bakery and Cafe in Olympia. “Every bit helps.”

Many workers around the country won’t be as lucky as residents of Washington, which is raising its minimum wage today by 15 cents an hour even though it already has the highest state baseline in the country.

Minimum-wage workers in Idaho will make nearly $2 an hour less in 2013 than their counterparts to the west.

Automatic increases designed to compensate for inflation have steadily pushed up wages in some states, even through the recession, expanding the pay gap between areas that make annual adjustments and those that don’t. Of the 10 states that will increase the minimum wage today, nine did so automatically to adjust for inflation.

Paul Sonn, legal co-director at the National Employment Law Project, said he hopes more states will start looking at automatic adjustments as the economy recovers. He said the model – which Washington adopted in 1998 – helps avoid sudden jolts as states try to catch up with each other.

“We think there’s a case that it’s better for everyone, including the business community, to have predictable, regular, small increases every year,” Sonn said.

The automatic adjustments aren’t much. Washington’s bump will mean those who work 40-hour weeks will earn an extra $6 a week – enough for a couple of lattes – or about $300 a year.

Many states, including Idaho, follow the federal minimum wage of $7.25 an hour.

San Francisco has set the highest local minimum wage and will have workers paid at least $10.55 an hour in 2013.

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