A Feb. 18 rally celebrating the California Labor Commissioner’s order for a McDonald’s franchise to rehire and compensate workers who went on strike for coronavirus protections was held on Feb. 18, 2021.
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This November, voters in at least three states will decide whether or not to raise their state-level minimum wages.
If history is any guide, the ballot measures in Alaska, Missouri and California are likely to pass, and lead to bigger paychecks for workers, said Sebastian Martinez Hickey, a state economic analyst at the Economic Policy Institute.
“Since 2014, 12 states have passed minimum wage increases through ballot measures,” Martinez Hickey told CNBC.
In many states, he added, “a statewide ballot initiative is the only plausible pathway, because conservative legislatures have failed to raise the wage.”
Meanwhile, voters in Arizona will decide on a ballot measure that would lower the minimum wage for tipped workers.
Here’s what’s at stake for workers who make the minimum wage, and the employers who pay them, in next month’s election.
Alaska: A $15 wage in a seasonal economy
Voters in Alaska will decide if they want to hike the state’s minimum wage to $15 an hour by 2027, with adjustments pegged to inflation after that. Ballot Measure No. 1 would raise the minimum wage to $13 in 2025, and to $14 in 2026.
Alaska’s current lowest possible hourly pay is $11.73, so the increase would be significant for those at the bottom of the earning scale. It would also be far-reaching. If approved, the increase would lift the earnings for some 30,800 Alaskans, the EPI estimates.
If the measure passes, employees would also have the chance to accrue 40 hours or 56 hours of paid sick leave, depending on the size of the company for which they work.
Fishing in Alaska, United States – Crab fishing boat for king crab, Bering Sea.
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“Raising the minimum wage and requiring paid sick leave helps both workers and small businesses, by incentivizing workers to stay at a job where they earn secure benefits and respectable pay,” said Alaska AFL-CIO President Joelle Hall.
Hall added that the measure would allow parents “to better afford basic necessities for their families such as healthcare and groceries.”
Kati Capozzi, CEO of the Alaska Chamber, said the business community opposes the measure.
“With Alaska’s highly seasonal economy, this will be devastating for our small businesses, who are struggling to make ends meet after years of surging prices and limited workforce,” Capozzi said.
Missouri: Paid sick leave, gradual wage hikes
Proposition A in Missouri, if approved, would gradually increase the minimum wage, with a bump to $13.75 an hour on Jan. 1, 2025, up from the current lowest wage of $12.30. By 2026, the minimum wage would reach $15. Afterward, increases would be based on inflation.
If the measure passes, all employers would also be required to provide their workers one hour of paid sick leave for every 30 hours worked.
Richard von Glahn, campaign manager for Missourians for Healthy Families and Fair Wages, said the ballot measure was “critically important.”
“Right now in Missouri, a full-time minimum wage worker earns less than $500 a week and 1 in 3 Missouri workers have no access to paid sick time.”
“This forces people to choose between their health and their bills, and no one should have to make that choice,” he told CNBC.
California: $18 an hour for high living costs
In California, Proposition 32 would increase the minimum wage to $18 from $16. The timeline of that boost would vary by employer size, giving businesses with 25 or fewer workers until 2026 to have to pay that amount. If the measure is successful, larger employers would need to raise the wage to $18 in 2025, and to $17 for the rest of 2024.
Such a change would likely push up wages for non-minimum wage workers as well, an estimate by the nonpartisan Legislative Analyst’s Office in California found.
San Francisco ranked in the top five of the happiest places to travel to in North America.
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LAO expects businesses to pass on their extra labor expenses to customers, but anticipates the overall increases in costs would be modest, at less than half of 1%.
The Golden State has one of the highest costs of living in the U.S. For a single adult in California to cover their basic expenses, they’d need to make $27.32 an hour, according to an analysis by the Massachusetts Institute of Technology.
Massachusetts, Arizona diverge on tipped wages
Massachusetts and Arizona both have ballot measures this fall concerning the minimum wage for workers who also make tips.
Restaurants and other businesses with tipped workers can often pay a lower hourly wage than the prevailing minimum in their state, on the assumption that tips will make up the difference. However, low-wage workers and labor advocates say the practice is often abused, leaving workers in a precarious and worse-off situation.
In theory, employers are legally required to ensure that tipped workers’ gratuities equal at least the regular minimum wage for the hours they worked in a given week, said Martinez Hickey, of the Economic Policy Institute.
But, in practice, he said, “this is highly difficult to enforce, since it often requires workers themselves to be aware of the law, calculate the difference between their own wages and the legal minimum, and confront their employer.”
Question 5 in Massachusetts would slowly phase out its tipped minimum wage of $6.75 per hour, until it eventually matches the state’s standard minimum wage by 2029. The current minimum wage in the state is $15 an hour.
In the Grand Canyon State, Proposition 138 would allow businesses to pay tipped workers 25% less than the minimum wage, if their total wages plus tips exceed $2 over the flat minimum wage across all their hours. As of now, tipped workers can be paid around 21% less than the current minimum wage of $14.35, as long as other requirements are met.
“This is a move in a backward direction for Arizona,” said Geraldine Miranda, an economic policy analyst at The Arizona Center for Economic Progress. Miranda estimates that if the ballot measure passes, the average tipped worker would lose around $1,400 a year.
Steve Chucri, president and CEO of the Arizona Restaurant Association, helped to get the measure on the ballot. He said it “preserves a restaurant and hospitality industry vital to Arizona’s economy.”
Proposition 138 “is our best defense against union activists who’ve made clear their plans to cram a California-style pay system down the throats of Arizona employers,” Chucri said.
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