New year brings minimum wage hike in 19 states
- The new year has rung in (and will soon ring in) numerous minimum wage increases, according to a report by Fisher Phillips. Nineteen states made changes to worker base pay, ranging from Minnesota's $8.04 for some employees to New York's $15 for New York City-based fast food workers. The federal minimum wage, which hasn't changed since 2009, is $7.25 per hour.
- Oregon and Washington, D.C., also have wage increases scheduled for July 1, 2019. Last January, 37 state and local wage increases took effect, ranging from $12 to $15 an hour. At that time, 18 states and 19 cities increased worker base pay.
- Experts are still debating whether wage increases harm workers. An analysis of 137 minimum-wage increases since 1979 showed that on average, jobs that pay below the new rate are eliminated, while jobs paying above the new minimum rate are added, the Washington Post has reported, refuting a paper on the effects of Seattle's minimum-wage increase that said the change left low-income workers worse off because it forced employers to reduce hiring and cut hours.
As employers review these changes, they may need to check for local minimum wage law changes, too. There are 24 cities and counties with higher local minimum wages that took effect Jan. 1, according to the Economic Policy Institute.
Wages are expected to tick up slightly in 2019, as employers begin to exhibit more confidence in the economy. Mercer's 2018/2019 US Compensation Planning survey of 1500 organizations was updated in November from the original poll to reflect a slight increase in predicted salary budget increases for 2019. Results showed that the average total budget increase, including merit and promotional budgets, is expected to be 3.4%, up from the 3.2% increase projected six months ago.
HR can view minimum wage increases as an opportunity to evaluate hiring and compensation policies, according to Karen Crone, CHRO at Paycor, a payroll services and HR management solutions provider. Crone previously offered some tips on navigating minimum wage increases, suggesting that when a minimum wage increase is expected, employers fill the gap beforehand by offering incentives to improve performance; have open conversations with managers on how to discuss wage increases with all employees; and use the hiring process to evaluate price points.