Minimum Wage

No one working full time should live in poverty

Washington State's innovative minimum wage law preserves buying power for low-wage workers by indexing increases to the rate of inflation. Today, a full-time worker earning minimum wage in Washington earns about $17,784 annually (at 2080 hours/year) - $4,160 more than workers in states with the federal minimum wage. Those added wages are plowed right back into the local economy.

A strong minimum wage also helps Washington's economy. The annual cost of living adjustments have no significant impact on employment overall, nor in the two largest employers of minimum wage workers: retail and restaurants. Washington's law also provide employers, who know well in advance the amount of the modest annual increases, with predictability, rather than facing occasional big jumps that result from a partisan political process.

With the January 2009 increase to $8.55, Washington retains its position of having the nation’s highest statewide minimum wage. But Washington’s minimum wage is effectively no higher today than it was in 2001, when cost-of-living adjustments began. In fact, if the state’s minimum wage in 1968 had kept pace with inflation all along, the minimum wage would be about $9.47 today.

Washington is joined by Oregon ($8.40) and Vermont ($8.06) as states which have the best minimum wages in the country. The federal minimum wage will be $7.25 per hour effective July 24, 2009. Washington became the first state to index minimum wage to inflation when voters passed a statewide initiative in November 1998. Since then, a majority of states have increased their minimum wage above the federal level, and at least nine other states have added annual inflation adjustments to their minimum wages.

Not every state has a strong minimum wage law. Currently, a typical no-frills basic family budget (see this Basic Family Budget Calculator) for a family with one parent and two children is $40,273 a year, about three times the income of a full-time worker making the current minimum wage. It takes an act of Congress, and often years of waiting, for some workers to simply get a cost of living adjustment, much less a raise.

That’s one of the inequities of the minimum wage that EPI economist Heidi Shierholz addresses in her briefing paper, Fix It and Forget It. She proposes a simple amendment to the minimum wage law, the Fair Labor Standards Act (FLSA), which will guarantee a consistent wage standard that rewards work, reduces poverty, and helps to ensure that growth in the economy is broadly shared across the workforce.

Recent Publications and News Highlights

Issue Guide on the Minimum Wage

07.21.2009 | Economic Policy Institute | Provides an accessible overview for those who are interested in the effects this important labor market policy has on the economy and its workers. It includes data on how many people are affected state-by-state, along with information about trends on the minimum wage’s value over time, and other clear, research-based answers to key questions and issues in the national debate over minimum wage policy.

State legislator nibbling at edges of Washington's minimum wage law

04.15.2009 | In January 2009, minimum wage workers in both Washington and Oregon saw their pay increase. The increases are proven way to maintain economic security for families, but a newly introduced bill would jeopardize the wage for younger workers.

Montana Rejects Minimum Wage Freeze

02.05.2009 | National Employment Law Project | The Montana state Senate resoundingly defeated a bill that would have frozen the state’s minimum wage for tipped workers like waitresses at diners – exempting them from annual cost-of-living increases approved by the 72% of the state’s voters in 2006. more »

Profile

"We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year," said Tom Singleton, manager of a Papa Murphy’s in Liberty Lake, WA.

Read Tom's story
(New York Times) »

Success Story

In 1998, EOI joined dozens of organizations and businesses to support Initiative 688, which boosted the state’s minimum wage and implemented a automatic cost-of-living adjustment.

You can't raise a family on just a minimum wage job

Even with the highest minimum wage in the nation, full-time minimum wage workers in Washington state earn just enough to stay above the federal poverty line – and far less than required for a basic family budget.

Voters: We're all better off with a strong minimum wage

In 1998 Washington had the lowest minimum wage on the West Coast -- nationwide, only 15 states had a lower minimum wage. All that changed when the voters spoke at the polls.

Staff Contact

Marilyn Watkins »

Building an economy that works. For everyone.