The National Law Forum

The Blog of the The National Law Review

Four States and Two Major Cities Approve Minimum Wage Increases

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Voters in the states of Alaska, Arkansas, Nebraska, and South Dakota voted in favor of ballot initiatives that will increase the state minimum wage. Alaska’s minimum wage will increase from $7.75 to $9.75 an hour by 2016, Arkansas’s from $6.25 to $8.50 by 2017, Nebraska’s from $7.25 to $9.00 by 2016, and South Dakota’s from $7.25 to $8.50 next year.

Those four states join 12 others and Washington, D.C., all of which have increased their minimum wage in the past two years. For example, New Jersey’s 2013 ballot initiative to raise the state minimum to $8.25 passed by more than 60 %, and in 2006, state initiatives to raise the minimum wage passed by large majorities in Arizona (65.6%), Missouri (75.6 %), Montana (74.2 %), Nevada (68.4 %), and Ohio (56.5 %).

Voters in San Francisco overwhelmingly approved a ballot initiative to raise the city’s minimum wage to $15 an hour, the highest level in the nation, on the heels of Seattle’s June decision to raise its minimum wage to $15. As with Seattle’s minimum wage, San Francisco’s will be phased in gradually, from its current rate of $10.74 an hour to $11.05 on January1 and $12.25 in May before increasing every year until reaching $15 in 2018.

On December 2, 2014, the Chicago City Council overwhelmingly approved raising the City’s minimum wage from the current state-wide rate of $8.25 an hour to $13 by mid-2019. Chicago workers will see their first increase next July, when the minimum wage will increase to $10, then increase by 50 cents each of the two years after that, and $1 the next two years.

This minimum wage initiative has also received some pushback. For example, Hotel industry groups on December 16 sued the city of Los Angeles in federal court over the city’s enactment of a minimum wage ordinance requiring large non-union hotels to pay their workers $15.37 an hour. In their lawsuit, the American Hotel & Lodging Association and the Asian-American Hotel Owners Association allege the city ordinance violates federal labor, contract and equal protection laws.

The hotel minimum wage ordinance, which passed the City Council in October on an 11-2 vote, is estimated to cover about 80 large hotels in the city. Starting in July, hotels with more than 300 rooms must pay workers the higher minimum wage; in July 2016 the measure kicks in for hotels with as few as 125 rooms. Hotel Industry groups contend that by allowing exemptions for hotels with union collective bargaining agreements, the ordinance creates an economic disadvantage for non-union hotels, thus forcing their hand to permit union organizing.

These minimum wage increases are not expected to make it more likely that Congress will pass President Obama’s proposed federal minimum wage increase to $10.10, particularly given the results of this past November’s mid-term elections. However, the minimum wage will certainly remain a hot-button issue for the next two years, and a campaign issue during the 2016 Presidential campaign.

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