States Still Leading Feds on Minimum Wage

States Still Leading Feds on Minimum Wage

Thursday, July 10th, 2008


PSN Resources

New Resources from PSN


WHAT: An event coinciding with the annual meeting of the National Conference of State Legislators sponsored by PSN and the National Labor Caucus.   Participants will develop and share strategies to advance real solutions to the issues that matter most to America’s working families, including the growing economic crisis, worker’s rights, health care, fair immigration reform, and smart growth and clean energy.
W New Orleans Hotel, New Orleans, LA
9:00am to 1:30pm, Monday, July 21, 2008
SPEAKERS INCLUDE: New York Times Best-Selling Author David Sirota and national radio commentator and author Jim Hightower



States Still Leading Feds on Minimum Wage

With food and gas prices rising rapidly, low-wage workers can at least welcome an increase in the federal minium wage to $6.55 per hour scheduled to go into effect on July 24th.  Even better, a number of states will also be increasing their minimum wage rates even higher than the federal rate:

  • $6.85 per hour in Nevada
  • $7.15 in Pennsylvania (for smaller employers to match the rate already for large employers)
  • $7.25 per hour in West Virginia
  • $7.40 per hour in Michigan
  • $7.55 in the District of Columbia
  • $7.75 in Illinois
  • $7.25 per hour in New Hampshirethis September and in Maine this October

Adding in states who have already raised their minimum wage, twenty-six states plus the Distrcit of Columbia, covering more than 60% of the U.S. population, will still have minimum rates above the federal rate. And even when the federal rate rises to $7.25 per hour next year, eleven states plus the D.C., covering 26% of the U.S. population, will still have a minimum wage rate higher than the federal level.  Five states plus D.C. will have minimum wage rates of $8 per hour or more.  

But here's something even more important: without any change in federal or state law, an additional six states will likely pass the federal minimum wage rate by 2011 because they have indexed their minimum wage rates to inflation.  Washington state, which began indexing its minimum wage rate to inflation back in 2001, will have the highest state minimum wage rate in the country at roughly $8.82 per hour (assuming 3% inflation over the next few years).

Unfortunately, all this means is that the working poor in Washington state and other indexed states will be treading water as prices rise, while the federal and non-indexed state rates will be losing value against inflation.  Compared to 1968, when the federal minimum wage was the equivalent of $9.34 per hour accounting for inflation, even the highest state minimum wage rates have lost value against inflation.   Measured as a percentage of the average wage, the federal minimum wage peaked in 1952 at 55% of the average wage and has now dropped well below 35% (graph courtesy of the Economic Policy Institute).

minimum wage loses value against average wages

All of this highlights the importance of more states raising their minimum wage rates and permanently indexing them to inflation.

More Resources





A Worrisome Trend in State Health Care Reform

Instead of working to make good coverage available to all residents, Florida and Georgia are leading a new wave of state proposals to push the uninsured and low-income Americans into high deductible and limited benefit health plans.  Backed by Newt Gingrich's Center for Health Transformation and playing the tune of John McCain's health care plans, the Florida and Georgia proposals are signs of what's to come from the Right in future state and federal health care debates.

Florida - Coverage in Name Only:  With an unfocused eye on the state's 3.8 million uninsured Floridians, lawmakers enacted the Cover Florida Plan (SB 2534) which, among other things, allows insurers to offer limited benefit health plans called “Consumer Choice Benefit Insurance Plans”?.  Monthly premiums will be capped at $150, but no subsidies will be made available to low-income residents.  Coverage will focus on preventive care, office visits, and prescription drugs, but there are no requirements that specialist care or lengthy hospitals stays be covered. Participating insurers will be allowed to limit the number of services they offer and cap amounts they pay for benefits.  While insurers won't be allowed to reject applicants based on health status, they can exclude coverage for pre-existing conditions.  

An analysis by the Center on Budget and Policy Priorities (CBPP) reports that take-up rates for limited benefits plans are very low with people recognizing that the plans are not worth their money and choosing not to sign up.  Florida’s own Health Flex Plans, which are limited benefit plans authorized by lawmakers in 2002, have had very limited uptake.  Only 2,280 people are enrolled in these plans, of which only 5 exist because of low consumer interest.  The Cover Florida Plan differs in that all residents will be eligible for the limited benefit plans. 

Georgia - Tax Breaks for Insurers:  Georgia in 2005, enacted a similar mandate-free and limited benefit plan, the Consumer Choice Benefits Health Insurance Plan.  This year, lawmakers decided to take another step in the wrong direction.  Ignoring all the evidence of the inadequacies associated with high deductible health plans, lawmakers enacted HB 977 which will spend at least $146 million in taxpayer dollars subsidizing high deductible health plans and health savings accounts.  The CBPP reports that the plan will exempt high deductible plans from premium taxes and offer tax credits for businesses and individuals that take up high deductible plans.  From 2009 to 2013, 67% of the state and local tax breaks given out totaling $223 million will go to insurers, according to the CBPP.

A major proponent of the Georgia plan was Newt Gingrich’s Center for Health Transformation (CHT), which said the law will make high deductible plans more affordable and lead to more individuals and small businesses to purchase them.  The CBPP analysis of the bill’s fiscal note shows that the number of high deductible plans would only increase by 65,000, far fewer than the 500,000 reported by CHT, which used faulty logic and 12 year old data to make its lofty projections.  And, most of the 65,000 will have moved from other insurance, because the meager tax breaks ”“ 6% of the cost of coverage for individuals and 5% for employers - are too little to help the majority of low-income uninsured Georgians.

What's Wrong with the Right's Approach?  As with John McCain's health care reform proposals, the Florida and Georgia plans are indicative of the Right's allegiance to "consumer-driven health care" - the idea that Americans will use less care if they must pay more out-of-pocket.  As the New York Times reports, Sen. McCain wants Americans to purchase their insurance in the volatile and costly individual market, eschewing the stronger bargaining power and better consumer protections found in employer-based and large group coverage.  The problem with this approach is that high out of pocket costs - which are the result of high deductible and limited benefit plans - lead consumers to avoid necessary care, resulting in worse outcomes and higher system-wide costs in the long run. 

As the CBPP reports, even modest levels of cost-sharing lead people to forgo necessary care.  Furthermore, the Florida and Georgia plans are unlikely to reduce the number of uninsured and will lead those who use them to be under-insured.

More Resources





Voting Information Project Opens Up New Ways for Voters to Get Essential Information

Although election advocates place great emphasis on reducing barriers to voter participation, calls to voting hotlines show that obtaining basic information such as where exactly to vote presents one of the most widespread hurdles to voting.  Because of this, easily accessible voting information would go a long way in facilitating voter participation.

In order to solve this problem, the Pew Charitable Trust’s Make Voting Work initiative and Google Inc. have teamed up with a group of Secretaries of State to create the Voting Information Project.  The project has developed an open format for voting information which election administrators can use to make their voting information available to third parties such as non-profits and search engines who can in turn make it available to voters.  The system is designed not to include any personally identifiable data, but can give any voter information for their address, including where to vote, what is on the ballot, and how they can register. 

[Screen shot link to video explaining project]

The project team will also assist election officials and their database administrators with converting the data in their current database to the new open format.  Sharing the data can be done with little upfront costs to the election agency and almost no ongoing costs.  In fact, election agencies may save money in the long run as more voter information outreach is done by third parties.  If cost is a prohibiting factor, the Project is making grants available to help cover the expense of converting data and setting up a system for continually exporting it through a “feed”? on the project’s website.

By setting up a standard format for exchanging voting information, the Voting Information Project is helping election officials get the information voters need to them where they look for it ”“ through search engines, political parties, and civic organizations.  Therefore, participating in the project is an easy way to better serve voters in your state.

More Resources



Research Roundup

Good Jobs New York has released subsidy snapshots, user-friendly maps of Manhattan firms that have received job-creation or retention subsidies.  The goal is to clearly show where companies receiving subsidies and which neighborhoods are being left out.

While much of the news on the foreclosure crisis focuses on homeowners, Policy Matters Ohio has released a new report, Collateral Damage: Renters in the Foreclosure Crisis, which highlights the problems renters face when their landlords face foreclosure.   They are usually given no notice and often face significant costs when forced to move.  Policy Matters Ohio notes that in the Cleveland region in Ohio, nearly 30 percent of all residential foreclosures were rental properties.

Critics of prevailing wage laws -- laws requiring that companies hired by government to build public works must pay wages reflecting standards in the local industry -- have often argued that they drive up costs for the taxpayer.  In fact, as a new survey of the literature by the Economic Policy Institute emphasizes,  not only do prevailing wage laws not increase costs but they provide social benefits such as better workplace safety, more government revenues, and elevated worker skills in the local construction industry.

In a new survey, the Alliance for Community Media finds that in states with state video franchise laws in place, allowing companies to bypass municipal agreements in providing video services, there has been significant lost access to public, educational and government (PEG) channels.  PEG channels have see funding cuts, lost channels, loss of access to facilities for producing shows, and loss of cable access at public buildings like libraries and schools.

Please email us leads on good research at


States Still Leading Feds on Minimum Wage

Economic Policy Institute, Securing the wage floor: Indexing would maintain the minimum wage's value and provide predictability to employers
Bureau of Labor Statistics, Minimum Wage Laws in the States - January 1, 2008
CCH Business and Corporate Compliance, Federal and many state minimum wage rates to go up in July

A Worrisome Trend in State Health Care Reform

Center on Budget and Policy Priorities - New Georgia and Florida Health Plans Are Unlikely to Reduce Ranks of Uninsured
Academy Health - Stateside: Recent State Updates
Academy Health, State Coverage Initiatives - Limited-Benefit Plans
Progressive States Network - The Bad Medicine of Consumer-Driven Health Plans
Progressive States Network - Health Care for All on the Installment Plann

Voting Information Project Opens Up New Ways for Voters to Get Essential Information

Pew Charitable Trust -Voting Information Project
Make Voting Work
The Reform Institute - Lack of Voter Access to Basic Information Impedes Elections


The Stateside Dispatch is written and edited by:

Nathan Newman, Policy Director
Julie Schwartz, Policy Specialist
Christian Smith-Socaris, Policy Specialist
Adam Thompson, Policy Specialist
Austin Guest, Communications Specialist
Marisol Thomer, Outreach Coordinator

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