Nearly 1 million minimum-wage workers in 10 states will get a pay boost come New Year’s Day. Workers in Rhode Island will see their paychecks grow the most — by an average of $510 a year for the average worker, according to the National Employment Law Project, a nonprofit advocacy group. The state enacted a law in June raising its minimum wage 35 cents to $7.75 an hour.
In nine other states — Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington — the minimum wage will jump between 10 and 15 cents an hour, translating to an extra $190 to $410 per year on average, according to NELP. The increases in these states are the result of state “indexing” laws that require automatic annual adjustments to keep pace with rising living costs.
“If you don’t do this, the lowest wage earners are going backwards,” said Jen Kern, NELP’s minimum wage campaign coordinator.
An estimated 855,000 workers will be directly affected by the wage changes, while another 140,000 are projected to be indirectly affected by the changes as employers readjust their pay scales to accommodate the new minimum, according to analysis by the Economic Policy Institute.
The new hourly rates will range between $7.35 in Missouri and $9.19 in Washington state, which has the highest minimum wage in the nation.
Workers may not notice much of a change in their paychecks, though, if lawmakers do not extend the payroll tax cut first enacted in 2010. Without the tax cut in place, workers would pay 6.2% instead of 4.2% — an amount that could wipe out most of the wage boost.