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Minimum wage gap grows wider between states

Monday, December 31, 2012

This Friday, Dec. 28,2012 photo Kaylee Feight talks about the impact of a minimum wage increase on her job at Quiznos in Helena, Mont. Montana's minimum wage workers are getting a small pay raise on New Year's Day when an automatic cost-of-living increase takes effect.
(AP photo/Matt Gouras)
OLYMPIA, Wash. (AP) -- 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 state, which is raising its minimum wage Tuesday 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 living just one state 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 Tuesday, nine did so automatically to adjust for inflation.

Rhode Island lawmakers approved that state's wage increase in the past year.

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 state 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 lattes -- or about $300 a year.

Hundreds of thousands of workers are expected to get a pay increase with the wage adjustments that begin New Year's Day. Along with Washington and Rhode Island, the changes will occur in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon and Vermont.

Among the nine states with automatic adjustments, the average minimum wage is $8.12 an hour, up from a little under $8. States that do not have automatic changes operate with an average minimum wage of about $7.40 -- a difference of about $1,500 a year for a full-time worker.

Many states, including Idaho, follow the federal minimum wage of $7.25 an hour, either because they've tied their minimum wage to that threshold or because the state-enacted minimum is lower than that.

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

Groups such as the National Restaurant Association oppose further increases in federal or state minimum wages, arguing that it's an ineffective way to reduce poverty and forces business owners to cut hours, raise prices or lay off workers.

At Tom's 1st Avenue Bento, a downtown Portland lunch spot, owner Tom Hume said he boosted pay for minimum-wage workers before the end of the year in order to get ahead of the game. He also raised prices on one-third of his menu items by 25 cents.

Natasha Baker, 22, who works at Hume's restaurant in Portland, recently moved back in with her mother but hopes to move to another apartment in January. She said the extra $5 or $6 she's earning every week with the salary boost is OK but won't make a huge difference.

"I don't usually look at what I get paid," she said. "I'm more directed on what's being taken out, which is more discouraging than anything."

In Montpelier, Vt., restaurant owner Irene Facciolo said she supported the 14-cents-an-hour increase in the minimum wage for her employees. She said the move from $8.46 to $8.60 an hour wasn't much.

"We don't have a problem with it at all," Facciolo said.


AP Writers Steven Dubois in Portland, Ore., and Dave Gram in Montpelier, Vt., contributed to this report. AP Writer Mike Baker can be reached on Facebook: http://on.fb.me/HiPpEV

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All passed on directly to the consumer groceries, fuel, dining out you name it the consumer pays the additional cost every time the minimum wage goes up.

-- Posted by swampeastmissouri on Mon, Dec 31, 2012, at 3:05 PM

The sad thing is that few people realize this point swamp.

-- Posted by le888 on Mon, Dec 31, 2012, at 5:43 PM

also people fail to see that it hurts the ones making 10-15 dollars an hour too.

-- Posted by le888 on Mon, Dec 31, 2012, at 5:44 PM

le888 it has got where some don't realize nothing any more they don't have a clue what is going on around them it is like they walk around in lala land.

-- Posted by swampeastmissouri on Mon, Dec 31, 2012, at 6:13 PM

Suggest it might be a bit more palatable if the minimum wage were keyed to a localized cost of living.

For example, depending on which source one chooses to believe and one's faith in the values given by cost-of-living indices - here are a couple - http://www.areavibes.com/san+francisco-c..., http://www.bestplaces.net/cost_of_living... - suggests the cost of living in San Fran is 161% - 199% of the national average.

The same sites for Cape Girardeau suggest a cost of living at 92% - 96% of the national average.

Given the federal minimum wage is currently $7.25, then for an equalized standard of living based on the cost of living, suggest the minimum wage rate in San Francisco should be between $7.25 x 1.61 = $11.67 to $7.25 x 1.99 = $14.43 per hour, while the minimum wage rate in Cape Girardeau should be $7.25 x 0.92 = $6.67 to $7.25 x 0.96 = $6.96 per hour.

Another way to look at it - even at the $10.55 minimum wage rate in San Francisco, suggests those folks would not enjoy the same standard of living as those earning $7.35 in Cape. To be followed up and countered with all the 'yeah, but...'s.

Then there's the argument on the pros and cons of even having a minimum wage rate, no matter what it may be ...

-- Posted by fxpwt on Mon, Dec 31, 2012, at 6:18 PM

Before the minimum wage, I hired Vulcans. I hate Vulcans, they got funny looking ears, but they are good workers and worked cheap. Since the minimum wage says I can't save by hiring Vulcans, I might as well hire people I like.

The minimum wage is discrimination against Vulcans that drives them into the welfare system.

-- Posted by Old John on Sun, Jan 6, 2013, at 12:30 AM

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