After the GOP’s tax code overhaul was signed into law by the President on Dec. 22, low-wage workers complained that they’d be the hardest hit in the new fiscal landscape. Recently, at least 18 states announced their plans to raise the statewide minimum wage starting next year.
Those states noted that this has remained unchanged in the last decade. The last time, the U.S. government hiked the minimum wage was in 2009. The federal value for this currently stands at $7.25 per hour. Yet workers want their minimum wages to become a “living wage”. Their goal is $15 per hour.
Eighteen states want to raise the wage in January next year. Of these states, ten have taken the decision as a response to the legislation passed in recent years. Eight states said they’d just adjust the wages for inflation.
A Minimum Wage Hike Could Affect 4.5 Million Workers
The Economic Policy Institute estimates that the increases will benefit 4.5 million American workers. As long as Congress doesn’t step in to raise the minimum wage nationwide, it is up to the states and cities to do it locally. EPI thinks that a higher such wage could curb income inequality among the U.S. workforce.
Since the early 1990s, lower-earners’ wages have failed to keep the pace with economic gains. Most wage increases benefited the top half of the U.S. workforce in the last three decades, EPI said.
Those criticising the higher minimum wage argue that the move could force businesses to lay off their workers to trim labor costs. Other businesses may simply increase the prices of their goods and services to offset the costs, while a select few could replace human workers with robots.
If labor costs are too high, employers can start looking for alternatives like automation, layoffs and giving more work to productive workers.
Image Source: Wikimedia
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