Worker compensation was on the ballot during Tuesday's big election, with voters in five states weighing in on local wage and benefits. Hikes in minimum wage levels or mandatory benefits were approved in four states, while a proposition to lower the minimum wage was voted down in South Dakota.
- Arizona voted 59 percent to 41 percent to approve Proposition 206, which advances legislation raising the state minimum wage to $12/hr by 2020 and guaranteeing paid sick time off from a job.
- Colorado voted 55 percent to 45 percent of approve Amendment 20, which would raise the state minimum wage to $12/hr by 2020.
- Maine approved 55 percent to 45 percent of raising the state minimum wage to $12/hr by 2020, and subsequently keeping the rate tied to the consumer price index of inflation.
- South Dakota vetoed 71 percent to 29 percent to lowering the minimum wage from $8.50/hr to $7.50/hr for anyone under the age of 18.
- Washington approved 60 percent to 40 percent of raising the state minimum wage to $13.50/hr by 2020 and guaranteeing paid sick time off from a job.
The latest list of minimum wage hike referendums comes amid a tightening job market. Data from the latest Job Openings and Labor Turnover Survey (JOLTS), issued November 8 by the U.S. Bureau of Labor Statistics, showed labor market activity returning to prerecession levels in 2015 for several major indicators of the state of the economy, including hires, separations, and quits. Job openings reached 5.8 million in July, a series high for this indicator at the time; the average for the year was 5.3 million.
Individuals hired, with an average level of 5.1 million, exceeded their November 2007 prerecession level. In a reversal of historical patterns, job openings exceeded new hires for 9 months in 2015. Total separations also approached prerecession level throughout the year and exceeded that level in December 2015; average total separations were 4.9 million for the year. The growth in total separations was pushed by a large increase in quits, which were up 11.5 percent in 2015. Quits averaged 2.8 million over 2015 and returned to prerecession levels for 4 of the last 5 months of the year.
With the raised profile of a national minimum wage demand, many states have decided taken up the issue themselves:
- New York became the second state to pass a new law that would raise the minimum wage in New York City to $15 per hour by the end of 2018. Washington D.C. followed suit, enacting a law to raise the minimum wage in the District to $15 per hour by July 1, 2020.
- On April 4, California enacted to increase the minimum wage to $15 per hour by Jan. 1, 2022, for employers with 26 or more employees. For employers with 25 or fewer employees the minimum wage will reach $15 per hour by Jan. 1, 2023. Increases may be paused if certain economic or budgetary conditions exist.
- On March 2, Oregon established a series of annual minimum wage increases from July 1, 2016 through July 1, 2022. Beginning July 1, 2023, the minimum wage rate will be indexed to inflation based on the Consumer Price Index.
Fourteen states began 2016 with higher minimum wages. Of those, 12 states increased their rates through legislation passed in the 2014 or 2015 sessions, while two states automatically increased their rates based on the cost of living.
Of the 11 states that currently tie increases to the cost of living, eight did not increase their minimum wage rates for 2016. Colorado provided for an 8-cent increase and South Dakota granted a 5-cent increase per hour. Increases in Nevada are required to take effect in July.
Maryland, Minnesota and D.C. have additional increases scheduled for 2016. Nevada will announce in July whether or not there will be a cost of living increase to their indexed minimum wage.
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