Wage Variability Found to Be Drastically Variable at Local, State Levels

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In recent months, the minimum wage has moved to the center of the economic policy debate. Proposals for minimum-wage increases are being introduced at the local, state, and national levels of government. Nationally, President Barack Obama is working alongside congressional Democrats on a push to raise the federal minimum wage from its current level of $7.25 to $10.10 by 2016.

At the state level, 20 states and the District of Columbia have minimum wages above the federal level, and on January 1, 13 states raised their minimum wage, with California set to follow suit with an increase to $9 in July. Of these 14 state increases, nine are automatic adjustments based on indexing the value of the minimum wage to the cost of living, while four (New Jersey, Connecticut, New York, and Rhode Island) are the product of either ballot measures or legislative action.

City governments have also taken action on this issue. Last year in San Jose, California, voters approved a measure raising the minimum wage to $10 an hour, including an annual cost-of-living adjustment that will keep the San Jose wage above the California-wide minimum. Likewise, in SeaTac, Washington, voters approved a measure increasing the minimum wage to $15 for transit and hotel workers, a particularly notable change given that Washington state already has the highest statewide minimum wage in the nation. Over the past few months, fast food workers held strikes in 130 U.S. cities demanding an increase in their wages. Most recently, in the District of Columbia, Mayor Vincent Gray signed a bill increasing the minimum wage from $8.25 to $9.50, and eventually to $11.50 by 2016.

Despite of all the energy behind these initiatives, more than half of U.S. states follow the federal minimum exactly — some of them merely by default ,as they lack any minimum wage legislation of their own. And wages vary widely across different states and different regions. For every San Francisco, Boston, or Seattle — where most of even the lowest-paid workers receive more than $10 an hour — there are cities such as El Paso, Texas; Shreveport, Louisiana; and Athens, Georgia, where thousands of workers barely earn $8 an hour.

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