States take lead on minimum wage
Workers are increasingly targeting states rather than the federal government for action on income; more votes to come this year.
By Christian Zappone, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) - A movement to raise the minimum wage is sweeping the country with 14 states raising their minimum wage since 2004 -- five in the past six months alone.

And campaigns to raise the minimum wage are underway in 10 more states, with six of those efforts in the form of statewide ballot initiatives.

The Michigan legislature acted in March 2006 to raise the minimum wage before a more extensive petition measure got on the ballot.

"We ended up with an increase but we avoided yearly increases linked to inflation," said Wendy Block, Director of Health Policy and Human Resources at the Michigan Chamber of Commerce. "At least we see an end to the increase."

The state's business community was more or less resigned to the increase when polling revealed it was supported by 80 percent of voters, Block explained.

"There's definitely a new dynamic in the states raising their minimum wage," said Jen Kern of Association of Community Organizations for Reform Now, an organization helping to coordinate the initiatives. "This is in direct response to Congress's failure to raise the federal minimum wage."

The federal minimum wage has been $5.15 since 1997.

Five states have approved minimum wage hikes in 2006 after campaigns led by local citizens alliances, labor organizations, and religious groups as well as nationally-known figures such as former vice presidential candidate Senator John Edwards. Those states are Arkansas, Maine, Maryland, Michigan and Rhode Island.

Initiatives to put minimum wage raises to the vote on state ballots are currently underway in Arizona, Colorado, Missouri, Ohio and Montana. Nevada voters approved of the measure in 2004 by 68 percent but must ratify it again this year in order for it to take effect.

Legislative efforts in California, Massachusetts, North Carolina and Pennsylvania could lead to increases as well.

The trend isn't limited to any geographical region and has shown as much support in the industrial states like Michigan as in rural states such as Arkansas.

By December, if Congress doesn't raise the federal minimum wage, it will be the longest period without a raise ever, according to Heather Boushey, research economist at the progressive Center of Economic and Policy Research (CEPR).

CEPR estimates there are 7.7 million low wage workers in the United States who earn wages at or near minimum wage.

Working 40 hours at $5.15 an hour amounts to $206 a week; that's $10,712 in 52 weeks. The poverty threshold for one person under 65 in 2005 was $10,160, according to the U.S. Census Bureau.

An increase to $7 an hour would mean a raise to $280 a week, or $14,560 a year.

Minimum wage hikes: a ballot result

"States are taking action now both because the federal minimum wage hasn't been raised in so long and because there is a lot of organizing around wage issues already in place," said Boushey.

Throughout the 1990s, "living wage" campaigns pushed cities, including Baltimore and Miami Beach, to pass ordinances guaranteeing workers with municipality contracts enough pay to support a family above the federal poverty line.

With those campaigns' expertise and infrastructure established at the city level, activists turned their attention to state-wide minimum-wage campaigns.

The strategy of putting the issue on state ballots, bypassing the legislatures, has grown popular in the wake of a 2004 constitutional amendment in Florida that passed with 71 percent of the vote -- the same election in which the state's presidential contest split voters 52 to 47 percent.

Skeptics see such campaigns as more about politics, drumming up support for left-leaning candidates. The constitutional amendment in Florida was "not about helping people out," says Mark Wilson, executive vice president of the Florida Chamber of Commerce. "It was about turning people out to vote [in a presidential election year]."

Wilson says that after the Florida amendment was passed, "18,000 Florida children lost their health insurance because parents made too much money to qualify for public assistance health insurance."

Wilson calls the minimum wage "a training wage that people make when they're learning skills that would help them earn more money."

Kern of ACORN argues that, minimum wage initiatives passing with by such large margins, it's neither a Democratic nor a Republican issue. ACORN is funded by membership dues of its low- and moderate-income families, grants and traditional fundraising.

Boushey at the CEPR concedes minimum wage hikes are more likely to strain a small business than a larger one. However, she says workers who can't earn enough end up draining state budgets because they can't contribute to the economy and often end up needing public assistance.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.