These states now have a minimum wage north of $7.25. Why not Utah?

As record inflation in the United States continues to have the most severe impacts on low-income individuals and families, new minimum hourly wage standards took effect Friday in 20 states, cities and counties across the country. .

While minimum wage thresholds are now above the federal minimum of $7.25 an hour in 30 states and the District of Columbia, 20 states, including Utah, continue to match the federal rate, which has remained unchanged since going from $6.55 to $7.25 per hour in 2009.

For context, that rate of $7.25 is now a dollar an hour lower than the federal poverty rate of $8.38 for a family of two or more with a single earner.

Who is pushing his minimum wage? The states that passed minimum wage increases on Friday include Connecticut, Nevada and Oregon, as well as the District of Columbia, which together have nearly 6 million workers, per CBS News. Additionally, the minimum wage in a dozen California cities, including Los Angeles and San Francisco, increased on July 1, as well as in Chicago and St. Paul, Minnesota. A few counties are also increasing their minimum wage, including Cook County in Illinois and Montgomery County in Maryland.

Some states have enacted simple base rate changes to their minimum wage laws while others have tied minimum wage rates to increases in the cost of living.

Holly Sklar, CEO of Business for a Fair Minimum Wage, which advocates for higher minimum wages, said indexing minimum wage rates is a fairer way of working to ensure even the lowest paid workers earn a living wage.

“When you have cost-of-living indexation, you run in place. It’s not like ‘I got a huge pay raise,’ but it keeps you from falling behind,” Sklar told CBS MoneyWatch. “It’s really vital.”

A year of wage increases, for some: A report released last December by payroll experts at Wolters Kluwer Legal & Regulatory US identified 26 states that have announced minimum wage rate increases in 2022.

On January 1, 2022, California became the first state to impose a minimum wage of $15 an hour, and Washington State is not far behind with its new minimum of $14.49 an hour. which entered into force on the same day.

While most states are making changes well below these rates, some city governments have imposed even higher requirements, with West Hollywood, California adopting the highest minimum wage rate in the nation, $17.64 from hour for hospitality workers.

Wolters Kluwer researchers said while some of the increases taking effect in 2022 had been planned for years, the conditions created by the COVID-19 pandemic have prompted other states to take action on wage issues.

“These minimum wage increases signal steps to ensure a living wage for people across the country,” Deirdre Kennedy, senior payroll analyst at Wolters Kluwer, said in a statement released with the report.

“In addition to previously approved incremental increases, the change in presidential administration earlier this year and the ongoing coronavirus pandemic also contributed to these changes.”

Inflation hits low wages hardest. Jacob Orchard, a doctoral student in economics at the University of California, San Diego, explains that the gap between rich and poor widens even more during times of inflation, what economists call Inflation inequalitydue to differences in the typical spending habits of people in each income group.

“In times of economic uncertainty and recession, most households tend to refrain from buying luxury products“wrote Orchard in a report for The conversation. “But on the whole, people cannot cut back on spending on basic necessities such as groceries and heating, although wealthier consumers are better placed to stock up on these necessities when prices are cheap. .

“This shift in spending from luxuries like vacations and new cars, to basic necessities, drives up inflation for poorer families more than for wealthier families. This is because that low-income households spend a higher percentage of their income on necessities.”

What is the history of minimum wage in Utah? Even amid soaring inflation that had the worst impacts on the state’s lowest incomes, Utah lawmakers avoided changing the $7.25-an-hour minimum wage, though that bills proposing rate changes appear in almost every legislative session.

Rep. Clare Collard’s most recent effort, D-Magna, was to give tipped employees a boost, but her HB364 the proposal from the 2022 legislative session was never heard by a committee.

In the 2021 session, Collard did a little better with a bill that would have raised the state’s minimum wage to $15 an hour over four years. This bill, HB284secured a hearing before the House Business and Labor Committee, but the body voted to table the proposal on a 10-3 vote and that’s where the effort died.

In presenting his salary increase proposal, Collard said there was a misconception that the state’s $7.25 minimum was just a rate that applied to high school students who were working or to those who had a first job.

“There are families trying to survive on these jobs, and some work two or three to make ends meet,” Collard told committee members. “When people earn more money, they increase their standard of living and inject more money into the economy. It goes back into the economy and allows people to survive.

During this 2021 hearing, Jordan Hess, Vice President of the St. George Area Chamber of Commerce, argued that it should remain the free market that makes these decisions and that a mandatory minimum at the statewide would harm rural areas of Utah.

“We don’t think the government should set these salaries. The free market economy on which our country was built, while flawed, has lifted more people out of poverty than any other economic system in the history of the world,” he said.

“And a $15 minimum wage could decimate a lot of our small businesses. … If $15 an hour is good for Salt Lake County, so much the better. Well, it won’t work in Washington County,” Hess said.

Julio V. Miller