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As a result of low-wage workers, advocates and unions protesting against the ever increasing gap between rich and poor, the new year brings a rise in minimum wage in 21 states together with the capital. For the first time, more than half of the U.S states will exceed the federal minimum of $ 7.25 an hour.
In some states low-wage workers make less than or as much as the federal minimum. These states are mainly in the South: Virginia, Texas, Kansas, North Dakota, Idaho and Utah.
The increase varies according to state. For example, the minimum wage in Washington State will be raised to $ 9.47 an hour. In cities such as Seattle and San Francisco the raise will eventually reach $15 and hour. Chicago plans to offer $13 an hour wage by year 2019.
Massachusetts plans to raise the hourly rate from $8 to $9 hoping it will reach $11 an hour by 2017
Major companies such as Ikea, Walmart and the Gap also plan to offer higher salaries to the lowest-paid workers.
It is estimated that 7 million people working for minimum income will obtain this increase in salary. Only in Massachusetts, 280, 000 people, meaning approximately 9 percent of the total work force will see an improvement in their wages.
Some economist wonder if this boost might bring more disadvantages than advantages. In addition to this, some employers are worried that raising wages might make it difficult for them to hire new work force and still maintain a profitable business.
There are already many costs implied when owning a business. Most companies need to pay their employees working on Sundays 50 % extra than on regular days. Spendings will increase even more once summer arrives and the new law requiring retailers to offer paid sick leaves becomes effective.
Some companies are already thinking about restructuring the staff department. Charlene Conway, co-owner of the Carousel Family Fun Center in Fairhaven and Whitman is considering reducing her staff consisting of 40 employees and even give up hiring teenagers. The owner considers it is not worth hiring a 14-year-old and pay him 9$ an hour when she could just as well pay an adult with much more experience to do the same thing.
Experts consider this to be an interesting event and are curious to see how things evolve in the job market when minimum wage will be adjusted at various levels.
Labor unions’ main goal was to make certain that having a job equals “living wage”.
Image Source: Radio FoxNews