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Future of the Minimum Wage

The minimum wage has been making headlines again with President Obama and Congressional Democrats pushing legislation to increase the wage from its current $7.25 to $10.10, in three 95 cent steps. After the third step increase, the minimum wage would be linked to a cost of living index. The legislation would also gradually increase the federal tipped wage to 70 percentage of the regular minimum wage. This proposal is much higher than the $9.00 per hour the President mentioned in his State of the Union Address last February. The federal minimum wage has been $7.25 since July 2009 as part of a three step increase signed into law in 2007. The tipped wage has been $2.13 since 1991.

For 2014, 21 states and DC will have minimum wages that are above the federal of which 10 states have their wage linked to cost of living index. Washington State has the highest minimum wage at $9.19 per hour effective Jan 1, 2014. WageWatch has posted a minimum wage chart in the Resources section for quick reference.

The idea of a living wage has received front page attention thanks to the national efforts of union organizers in the fast-food industry who have been campaigning for a $15.00 per hour minimum wage for their “quick service” workers. During this past Black Friday shopping week, Wal-Mart workers protested stores with similar demands.

Opposition groups and business leaders contend that such a wage increase could backfire by reducing employment opportunities claiming most franchises operate on small margins and would have to reduce their workforce and cut back on workers’ hours. The restaurant industry responded similarly to new healthcare mandates. Some economists predict that a $15 per hour wage could reduce the country’s 2.5 million fast-food workers by 20%.

 Some municipalities have gone beyond their state minimum wages by enacting their own. Last month, the town of SeaTac, WA, known for its major airport, narrowly approved a wage hike to $15.00 which affected approximately 6,500 workers. This past week, the District of Colombia is looking to create an $11.50 min wage with regional support nearby suburbs. The region has over 2.5 million residents. The final vote for this increase is in early 2014. The city of San Francesco has the highest min wage in the country at $10.74 and Santa Fe is second with $10.51.

Within the lodging industry, the national average wages for entry level positions are almost always above minimum wage. According to the 2013 WageWatch Hospitality Compensation Survey of over 5,000 properties nationwide, the average rate for full service hotel Front Desk Agents is $12.57 and $11.52 for Housekeepers. For the smaller select service hotels the average pay for a Front Desk Agent is $10.05 and $9.08 for Housekeepers, all well above the $7.25 federal minimum. These rates do not include tips or gratuities which would push the total cash compensation even higher.

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This entry was posted on Thursday, December 12th, 2013 at 7:52 AM and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.