Rob Horowitz: RI’s Minimum Wage Boost Good News For Families
Tuesday, July 30, 2013
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The second raise of the minimum wage from $7.75 to $8 will help Rhode Island families struggling to support themselves.
For the second year in a row, Rhode Island has boosted its minimum wage, bringing a bit of good news to struggling Rhode Island families. As a result of legislation adopted towards the end of the legislative session and recently signed into law by Governor Chafee, the minimum wage in Rhode Island will increase by 25 cents to $8.00 an hour on January 1, 2014. This increase comes on top of a 35 cent increase implemented at the beginning of this year.
Taken together, these increases bring Rhode Island’s minimum wage in line with neighboring Massachusetts and only a little bit behind Connecticut with its $8.25 an hour minimum. At $8.60 an hour Vermont’s minimum wage is the highest in New England. Maine and New Hampshire’s minimum wages at $7.50 and $7.25 an hour respectively are now lower than ours.
Last increased in 2009, the federal minimum wage remains $7.25 an hour where it is likely to stay for the foreseeable future. Not surprisingly, President Obama’s proposal for a raise to $9 an hour, coupled with automatic annual increases based on the rate of inflation, has gained little traction in Congress. This makes action at the state-level all the more important.
The rise in the state minimum wage will put more take home pay in the pockets of the 10,000 Rhode Islanders or so who now earn it. Taken together with last year’s increase, it will also put some needed upward pressure on other wages near the bottom of the earning scale. The modest increased demand for goods and services by these wage earners will have a positive ripple effect throughout the Rhode Island economy.
Contrary to what some observers argue, the overwhelming majority of people who earn the minimum wage are adults—not teenagers—and many of them are struggling to support families. According to a recent Pew Research Center analysis, while minimum wage workers tend to skew young, more than 3-out-of-4 are, in fact, age 20 or over. Further, nearly 8-in-10 are white.
While opponents of boosting the minimum wage raise the specter of job losses and some research backs up this view, five separate academic studies confirm that minimum wage increases do not result in net job losses—even in times of high unemployment. It is also true that Rhode Island’s minimum wage is in the same ball park as neighboring Connecticut and Massachusetts.
Of course, Rhode Island’s concerted effort to boost its minimum wage will not by itself lead to economic salvation. Still, the State is to be applauded for taking a step that provides a shot-in-the-arm to some of our most vulnerable and hard working residents, along with a modest assist to the overall economy.
Rob Horowitz is a strategic and communications consultant who provides general consulting, public relations, direct mail services and polling for national and state issue organizations, various non-profits and elected officials and candidates. He is an Adjunct Professor of Political Science at the University of Rhode Island.
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