Four states passed proposals to increase the minimum wage, adding to the growing support for higher pay floors for U.S. workers
By Sean Ollocca
CFO Magazine, Nov 17, 2016
Employees at low-paying jobs in four states can expect a raise next year after voters passed proposals on Election Day to increase the minimum wage. Arizona, Maine, and Colorado plan to gradually increase the wage floor to $12 from an average of just under $8 by 2020. Washington will hike an already above-average $9.47 an hour to $13.50 an hour over the same period. ...
For advocacy groups, the wide-ranging support for the ballot proposals from constituencies ranging from the West Coast to New England is an encouraging sign for a potential federal increase. Holly Sklar, CEO of Business for a Fair Minimum Wage, says the lowest mandatory wages have lagged far behind cost-of-living expenses for the better part of five decades. The high-water mark was 1968, when the federal wage floor hit $11.10 an hour in today’s dollars.
“This election reinforced just how much support there is for raising the minimum wage,” Sklar says. “Voters from four very different states from four very different parts of the country agree.”
Sklar and others are calling on Congress to follow suit. ...
While increases may dent companies’ finances in the near term, proponents argue wage hikes are actually investments in local businesses and the economy at large. Because employees are also consumers, raising the minimum wage increases consumer demand by putting money back into the hands of potential customers. Companies usually have more customers than workers.
Low-wage employers commonly have higher turnover rates than other companies, as well. Paying employees more gives them more incentive to stay with the company, cutting the turnover rate and effectively lowering costs incurred while hiring new employees, like paying for additional training, managerial oversight, and product waste. Increased productivity and customer satisfaction are also benefits of a better paid and more committed employee, backers of minimum-wage hikes say.
“There’s an expectation in this country that if you work full-time year round that you won’t be living in poverty,” Sklar said. “Too many workers are living in poverty.”
Copyright 2016 CFO