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by Vault Careers | December 22, 2010

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On January 1, low-wage earners in seven states will enjoy permanent pay raises as minimum wage increases go into effect. The Huffington Post reports that state governments in Arizona, Colorado, Montana, Ohio, Oregon, Vermont and Washington have authorized minimum wage improvements that will see each state's wage floor beat the federal mandate of $7.25 per hour. Employees in Washington will benefit the most, with minimum wage earners bringing in an improved $8.67 per hour—the highest statewide rate in the U.S.

The increases could provide stimulus-like boosts to the seven states' economies. With the bulk of recovery job growth occurring in low- and middle-wage industries (below $15 per hour), these modest increases will fatten the wallets of an increasingly large and relevant demographic. Because minimum wage earners can rarely afford to save money, much of the wage increase will directly result in increased spending. "Minimum wage increases go directly to workers who spend them immediately—because they have to—on basic necessities like food, gas, rent and clothing," says Christine Owens, executive director of the National Employment Law Project (NELP). NELP also denies critics' arguments that wage increases impede job creation, citing two recent studies that find no link between higher minimum wages and unemployment.

While Washington will claim the country's highest statewide minimum wage rate, local governments are also implementing even higher standards to help their workforces cope with unprecedented economic pressures. Effective January 1, employees in San Francisco, CA will be guaranteed at least $9.92 for each hour they work. That increase will see the city's wage floor supplant Sante Fe, New Mexico's ($9.85 per hour) as the nation's highest.

For more information:
The Huffington Post:
NELP: Low- & Middle-Wage Industries Dominate Early Stages of Job Growth
UC Berkeley: Minimum Wage Effects Across State Borders

- Sam Reynolds

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Filed Under: Salary & Benefits

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