The Rise of the Minimum Wage: Implications for the American Economy and Labor Laws after the First Four-Year Collision
Ms. Garcia said she hoped that New York would raise its minimum wage to at least $20 an hour soon, so she no longer had to ask herself, “Do I put food on the table or do I pay my rent?”
Those demands sounded fanciful at first, but with the backing of powerful labor unions like the New York Hotel and Gaming Trades Council and the Service Employees International Union, they spurred a proposal to raise the minimum hourly wage for most workers in the city from $9 to $15 in just three years.
Consumer prices have risen this year at a painful pace that many Americans have never experienced. The official national rate of inflation for the past 12 months was 8.2 percent. It was lower in the New York metropolitan area due to the high cost of gasoline.
Even with a minimum wage hike of up to 7 percent, labor costs will not go up as much as they have in the past. “That also means that prices aren’t going to go up at [places like] restaurants.”
This year’s state minimum wage increases will be a result of the high inflation that has had a major impact on the US economy.
By January 1, hourly minimum wages in 23 states will rise as part of previously scheduled efforts to reach $15 an hour or to account for cost-of-living changes. The increases account for more than $5 billion in pay boosts for an estimated 8.4 million workers, the Economic Policy Institute estimates.
The larger-than-typical increases for a dozen states come after inflation hit a 40-year high this summer, leaving families struggling to keep up with the rising costs.
The growing chasm in America’s wealth gap has been revealed by the Pandemic and subsequent economic recovery. Over the last two years, low pay and working conditions have contributed to a swell of labor movement activity and actions by corporations to raise their wage floor.
“The story is different because wages have been increasing at the low-end, much faster than inflation and much faster than in middle- or high-wage jobs,” said Michael Reich, economics professor at the University of California at Berkeley. Many workers in the states with the minimum wage are already getting paid more than $10 an hour.