Minimum Wage Issues
The Fair Labor Standards Act (“FLSA”) was passed in 1938 as part of the New Deal legislation. The FLSA created a federal minimum wage of $.25 per hour. In 1968, the minimum wage was $1.60 per hour (about $11.00 per hour in 2015 dollars). From about 1997–2007, the minimum wage was $5.15 per hour. In 2007 it went up to $6.55 per hour. In 2009, the wage went to $7.25 per hour and has remained there ever since as Congress has been unwilling to increase it.
In 2015, 29 states and the District of Columbia had a minimum wage higher than the federal rate. For several years, Washington has had the highest minimum wage (currently $9.47 per hour) in the country. In 2016, that will change, however, when California’s minimum wage goes to $10 per hour. Alaska’s minimum wage may soon exceed Washington’s as well.
Meanwhile, at the local level many municipalities have increased their minimum wage as well, including, for example, San Francisco and Oakland (both at $12.25 per hour) and San Jose (at $10.30 per hour). Here in Washington, the Seattle minimum wage is $11.00 per hour and will increase eventually to $15 per hour. In SeaTac it is now $15.24 per hour while in February 2016 Tacoma’s minimum wage will be $10.35 per hour.
Economists and politicians continue to debate whether an increased minimum wage helps or hurts the economy and, in particular, whether it creates jobs because workers have more money to spend or instead destroys jobs because employers may be more reluctant to hire new workers. In some industries an unintended consequence of the increased minimum wage has been a flattening of wages — i.e., workers with more experience receive lower wage increases to offset the increased starting wages created by the new minimum wage rates.