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For a long time in this country, we’ve debated about increasing the minimum wage. On January 1st, the minimum wage has gone up in 20 states, and 32 cities and counties and there’s a roadmap for this to increase in many other states later in 2021 – where eventually people are going to fight for $15 per hour. So in today’s video I wanted to talk about who’s getting the increase, how much for, and how or if this will affect the rest of the country.
I remember my first minimum wage job – it was at a magic shop ironically, I was selling magic tricks to tourists. I was 15 at the time and I remember starting that part time job at $8.25 an hour – that was 16 years ago. So I saved up all the money I could, and it took me 3 months of working the entire summer to save up and buy a camera. That camera cost $1,500. That minimum wage of $8.25 an hour that I was paid when I was only 15, is still very close to the minimum wage today. That same $1500 in 2004, would cost $2,066.40 which is a 37.8% increase. Inflation is real.
To help with incomes, we have two different sets of wage laws – the state minimum wage and the federal minimum wage. Now the federal minimum wage is officially $7.25 per hour which hasn’t changed since 2009 and all the federal wage does is it tells the states what the legal minimum requirement is, but the federal law cannot tell the states what they should pay other than the minimum. States with a lower minimum wage than the federal wage have to follow the Fair Labor Standard Act, so it’s automatically reverted back up to the federal minimum of $7.25. This is to make sure states don’t just set the minimum to a dollar and take advantage of people’s labor.
For people that are excited about the increase to the minimum wage and if you’ve read articles that say $15 per hour is going to be the new standard, unfortunately that’s not the entire truth. Let me show you the breakdown of which states have increased their minimum hourly rate and by how much.
Alaska: $10.19 to $10.34 (up 15 cents)
Arizona: $12 to $12.15 (up 15 cents)
Arkansas: $10 to $11 (up one dollar)
California: $13 to $14 (up one dollar)
Colorado: $12 to $12.32 (up 32 cents)
Florida: $8.56 to $8.65 (up nine cents)
Illinois: $10 to $11 (up one dollar)
Maine: $12 to $12.15 (up 15 cents)
Maryland: $11 to $11.75 (up 75 cents)
Massachusetts: $12.75 to $13.50 (up 75 cents)
Michigan: 9.65 to 9.87 (up 22 cents)
Minnesota: $10 to $10.08 (up eight cents)
Missouri: $9.45 to $10.30 (up 85 cents)
Montana: $8.65 to $8.75 (up 10 cents)
Nevada: 9 to 9.75 (up 75 cents)
New Jersey: $11 to $12 (up one dollar)
New Mexico: $9 to $10.50 (up $1.50)
New York: $11.80 to $12.50 (up 70 cents)
Ohio: $8.70 to $8.80 (up 10 cents)
South Dakota: $9.30 to $9.45 (up 15 cents)
Vermont: $10.96 to $11.75 (up 79 cents)
Washington: 13.50 to 13.69 (up 19 cents)
Improves the quality of life which allows people to actually provide for the basic necessities. We think that increasing the federal minimum wage to $15 per by 2025 would help roughly 1.3 million people out of poverty and boost 17 million people’s incomes – that’s great! Another benefit is you get happier employees that actually work longer so there’s less of a turnover rate. And by increasing the hourly rate, it would actually decrease people’s real income by only .1% (https://www.cbo.gov/publication/55410)
Even though there’s a push to increase wages to $15 per hour by the year 2025, in relation to how much prices will have grown, the effects will potentially cancel each other out. Nevada just increased from $8.25 to a whole $9 an hour. That represents a 9% increase but inflation has eaten away 37.8% in comparison. So that is still a fraction of the increase that is necessary to catch us up to where we need to be.
*None of this is meant to be construed as investment advice, it’s for entertainment purposes only. Links above include affiliate commission or referrals. I’m part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.