Minimum wage laws raised the wage floor in eight states as of Jan. 1. Washington now tops all states, at $9.04 an hour. Economic effects of raising the minimum wage are in hot dispute.
Low-wage earners have a little more to celebrate this new year, at least in eight states.
In those states, 2012 means a higher minimum wage, under laws that peg the wage floor to inflation. The increase makes Washington the first state to set its minimum wage higher than $9 an hour.
Why Washington? Why now?
Simple. Washington pegs its minimum wage to the consumer price index, says Paul Sonn of the National Employment Law Project. That means whenever the cost of living increases, so does the minimum wage there.
Nine other states do the same. (One of them, Missouri, opted for no change this year, and Nevada's increase won't kick in until midyear, leaving eight states where the minimum wage rose as of Jan. 1.) But Washington has been using that CPI-based formula since 2001, longer than any other state, and that's why its hourly wage is highest.
Of course enacting such a law is difficult. Most states that have laws tying minimum wages to the consumer price index have done so via ballot initiatives. This keeps the political football out of politicians' hands and gives it to voters, who mostly feel that raising the minimum wage as consumer prices increase is a good idea, says Mr. Sonn.
The new minimum wage laws, which also took effect Jan. 1 in Arizona, Colorado, Florida, Montana, Ohio, Oregon, and Vermont, will increase paychecks for more than 1 million workers, according to the Economic Policy Institute (EPI).