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Politics Fuels Minimum Wage Hikes

It’s that time again when employers should be prepared for all of the Jan.1 annual increases in the minimum wage throughout the country.

In recent years unions have pressed their “Fight for Fifteen” campaign which encouraged adoption of higher minimum wage laws in Blue states and other Democrat-dominated localities.

Ironically, after passage of tax reform, at least 30 large employers like AT&T and Comcast unilaterally adopted a $15 minimum wage.

The left continues to attack tax reform, even calling for a boycott of AT&T for providing propaganda support for President Trump by raising wages and paying bonuses to its employees.

The federal minimum wage for covered nonexempt employees is $7.25 per hour, which went into effect in 2009. With Republicans controlling Congress and the White House it is unlikely to see any change in the foreseeable future.

The Obama Administration’s overtime rule raising the minimum salary to more than $47,000 to qualify an employee as nonexempt was stayed in federal court, and effectively died when Trump took office.

However, Labor Secretary Alexander Acosta recently told Congress his department is mulling revisiting the issue (AA, 12-15-17. P. 4).

Beginning Jan. 1, 2018, federal contractors and subcontractors are required to pay a minimum wage of $10.35 an hour. The federal contractors’ minimum wage previously was $10.20 an hour.

The choice to raise the minimum wage is not an economic decision but is a political one, and as the late Speaker of the House Tip O’Neil famously observed, all politics is local. Let’s take a quick look at developments taking place in 2018:

As of Jan. 1, Missouri’s minimum goes up from $7.70 to $7.85 per hour. South Dakota’s minimum wage will increase from $8.65 to $8.85 per hour.

California’s statewide minimum wage moves from $10.50 to $11.00, for employers with 26 or more employees, and from $10.00 to $10.50 for firms with 25 or fewer employees.

Employers in California also must deal with local wage laws. For example, in Oakland, CA, the minimum wage increases from $12.86 to $13.23 per hour on Jan. 1. Last October, the minimum wage in Berkeley, CA, was raised from $12.53 to $13.75 per hour.

For those who operate businesses inside the boundaries of San Francisco, the current minimum wage of $14 an hour will jump to $15 on July 1.

Some of the other states where employers are going to see Jan. 1 increases are: Alaska (to $9.84), Arizona ($10.50), Colorado ($10.20), Florida ($8.25), Hawaii ($10.10), Maine ($10.00), Michigan ($9.25), Missouri ($7.85), Montana ($8.30), New Jersey ($8.60), Rhode Island ($10.10), South Dakota ($8.85), Vermont ($10.50) and Washington ($11.50).

In Minnesota on Jan. 1 the minimum wages rises to $9.65 for employers with annual gross revenues of $500,000 or more and to $7.87 for employers with annual gross revenue of less than $500,000.

In Ohio it rises to $8.30 for companies with gross receipts of more than $305,000 and to $7.25 for firms with gross receipts under $305,000.

In New York on Dec. 31, 2017 the minimum wages went up to $11.00 per hour in Nassau, Suffolk, Westchester counties; and $10.40 for the remainder of the state ($11.75 for fast food employees outside of New York City).

Several states and other jurisdictions also have hikes scheduled to start on July 1, 2018, including Washington, DC, to $13.25 per hour, Maryland to $10.10 and in Oregon, where rises to $12.00 the Portland metro area, $10.75 in urban counties and $10.50 rural counties.

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