Minimum Wage Goes Up For 1.4 Million Workers in 2012

NEW YORK – While the economy still struggles onward into an uncertain future, more than 1.4 million low-income earners will see their paychecks increase after the new year as minimum wage goes up in 2012.

Minimum wage is set to go up on New Years Day for Arizona, Colorado, Florida, Montana, Ohio, Oregon,Vermont, and Washington. It will reportedly rise between 28 and 37 cents per hour starting Jan. 1, due to state requirements that minimum wage stays consistent with inflation.

The federal minimum wage rate stands at $7.25 per hour, which adds up to an average annual income of approximately $15,000. 18 states have wage rates above the federal requirement, and 10 states raise minimum wage every year in order to keep a steady pace with the rising cost of living.

Rates in the states mentioned above will start at $7.64 per hour in Colorado, and reach as high as $9.04 in Washington next year. These increases are expected to put an extra $582 to $770 in the pockets of full-time minimum wage earners. These increases come with a hope that higher pay will result in a potential economic boost. 2012’s minimum wage increases should raise consumer spending, adding about $336 million to the nation’s gross domestic product and result in the creation of more than 3,000 full-time jobs. Paul Sonn, legal co-director at NELP, had this to say about the anticipated increase:

“Increasing minimum wage is a key form of local stimulus. It helps front-line workers whose wages have been stagnant and falling by putting more money into the pockets of low income families who then spend the money at local businesses.”

Low-wage workers, with average wages under $13.52 an hour, have watched their wages decline 2.3% since the beginning of the recession. Roughly 80% of low-wage workers affected by the increases are over the age of 20, with 78% working at least 20 hours a week.

The minimum wage boosts might be just what we need right now given the questionable progress of the payroll tax cut. Though a short-term extension was approved on Friday, it only extends the tax breaks to February, giving business owners a very tiny and unstable window to plan for the future.

So is this just what our nation needs right now? Let us know down below.