Looking for a reason to celebrate the new year? Here’s one: On Jan. 1, 2025, at least 21 states will raise their minimum wage. That includes one of Maryland’s neighbors, The First State of Delaware, where employers will be expected to pay their workers at least $15 per hour. That makes it one of 15 states that’s set the bar at $15. Maryland hit that mark on Jan. 1 of this year. And it’s not just good news for workers at the bottom of the pay scale. Boosts in the minimum wage can boost consumer spending, with benefits across the economy.
Now contrast that to the federal minimum wage, which remains a pitiful $7.25 an hour, unchanged since 2009, the longest period in history without an increase. Had the federal minimum wage simply kept up with inflation since its peak year of 1968 (when it was $1.60), it would be $14.76 today, according to Business for a Fair Minimum Wage, an advocacy group formed by business owners.
The problem with a stagnant federal minimum wage is that it leads to poverty in states (disproportionately in the South) that have similarly failed to keep pace (or like Louisiana, Mississippi, Alabama, South Carolina and Tennessee fail to have a minimum wage of any kind). People can’t meet basic needs like housing and food and the suffering is usually felt worst by women and minorities. This kind of occupational segregation can have an impact that spans generations. Shouldn’t we promote a more equitable economy that works for all?
This shouldn’t be especially controversial. The United States has had a minimum wage since 1938 in response to the Great Depression. One would think politically conservative states would favor it simply because it reduces the rolls of costly government assistance programs while lifting consumer spending, which helps the overall economy. And did we mention that it helps attract and retain quality employees like, oh, higher teacher salaries? This isn’t a handout, it’s very much a well-deserved hand up. One would think that would appeal to hardcore red state capitalists.
And, apparently, it can. None other than President-elect Donald Trump has indicated he’d consider raising the federal minimum wage, calling $7.25 an hour a “very low number” during an NBC interview earlier this month. We’re not sure you can take that possibility to the bank given GOP resistance in Congress, but it’s a sign of how stagnant pay is becoming a growing problem for the next administration.
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