There are eight states that have legislated annual, inflation-linked increases in their minimum wage. This “indexing” of the minimum wage ensures that the real value of the lowest-paid workers’ wages does not shrink as normal costs of living go up. On Jan. 1, 2012, minimum-wage workers in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington will all see an increase in their paychecks.
The table below describes the workers affected by the increase. Across these eight states, an estimated 1,045,000 workers will be “directly affected.” These are workers whose current wages are between the existing state minimum wage and the new Jan. 1 minimum wage. In addition, another 394,000 workers will be “indirectly affected” by the increase. These indirectly-affected workers are those whose current wages are just above the new Jan. 1 minimum, and are likely to also see a wage increase as employers adjust their overall pay structures to reflect the new minimum (the “spillover” effect).
In total, more than 1.4 million low-wage workers will benefit from these increases, the vast majority of whom are over the age of 20 and work more than 20 hours per week. For more information on minimum-wage workers, indexing the minimum wage, and the economic effects of minimum wage increases, see Fix it and forget it (2009) by EPI’s Heidi Shierholz.
Click below for a full-size image of a spreadsheet showing the impact of the minimum wage increases: