These 18 States Are Raising the Minimum Wage in 2018

states raising minimum wage 2018
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Roughly 4.5 million workers in 18 states are starting off the new year with a pay raise.

Many of the new minimum wages are significantly higher than the federal minimum wage of $7.25, a rate that states are slowly but surely leaving behind. The Wage and Hour Division of the Department of Labor enforces wage laws, but a new federal minimum wage cannot be set unless a bill is passed by Congress and the president signs it into law.

Since 2009, the last time the federal minimum wage was raised, states have had to act independently to counter rising costs of living as well as the demands of their citizens.

Some 80 million Americans are paid hourly — a group that makes up nearly 59 percent of all wage and salary workers.

The number of people who earned the federal minimum wage or less decreased from 3.3 percent in 2015 to 2.7 percent in 2016, according to the U.S. Bureau of Labor Statistics. The 2016 percentage is far less than in 1979, when records started to be kept consistently and the number of people at or below minimum wage was 13.4 percent.

The 2018 wage increases were, for eight states, due to cost-of-living increases, and for 10 states, a result of approved legislation or ballot initiatives.

Who gets more pay?

An estimated 4.5 million U.S. workers are set to receive a total of $5 billion in additional wages, according to the Economic Policy Institute.

“Increasing the minimum wage is a crucial tool to help stop growing wage inequality, particularly for women and people of color who disproportionately hold minimum wage jobs,” wrote Janelle Jones, an economic analyst with the Institute. “As low-wage workers face a growing number of attacks on their ability get a fair return on their work, Congress should act to set a higher wage floor for working people.”

Keep in mind, however, that tipped wages are significantly lower than minimum wages, and wage laws have exceptions, such as full-time students or persons with disabilities. Not every employee who works on an hourly basis is affected by the changes.

Where is the minimum wage increasing?

Here’s a breakdown of the 18 states with higher minimum wages in 2018, using information from the National Conference of State Legislatures. These states join the 19 states in 2017 that raised their minimum wages.

State

Minimum Wage

Reasons and Future Adjustments

Alaska

$9.84

Change due to cost of living.

Arizona

$10.50

Change due to ballot/legislature.
Set to increase to $11 beginning 2019 and $12 in 2020. At the start of 2021, the rate will increase annually based on cost of living.

California

$11

Change due to ballot/legislature.
Set to increase to $12 in 2019, $13 in 2020, $14 in 2021, and $15 in 2022. At the start of 2023, the rate will increase annually based on the consumer price index.

Colorado

$10.20

Change due to ballot/legislature.
Set to increase to $11.10 in 2019 and $12 in 2020. At the start of 2021, the rate will increase annually based on the cost of living.

Florida

$8.25

Change due to cost of living, based on a 2004 constitutional amendment.

Hawaii

$10.10

Change due to ballot/legislature.

Maine

$10

Change due to ballot/legislature.
Set to increase to $11 in 2019 and $12 in 2020. At the start of 2021, the rate will increase annually based on the consumer price index.

Michigan

$9.25

Change due to ballot/legislature.
At the start of 2019, the rate will increase annually based on the consumer price index, but increases will cap at 3.5 percent.

Minnesota

$9.65/$7.87

Change due to cost of living.
Due to 2014's HB 2091, businesses with annual sales over $500,000 have a higher minimum wage than those with sales under $500,000.

Missouri

$7.85

Change due to cost of living.

Montana

$8.30/hr for businesses with annual sales over $110,000
$4/hr for businesses with annual sales under $110,000.

Change due to consumer price index.

New Jersey

$8.60

Change due to consumer price index.

New York

$10.40

Change due to ballot/legislature.
Set to increase to $11.10 beginning Dec. 31, 2018, $11.80 in 2019, and $12.50 in 2020. At the start of 2021, the rate will increase annually for inflation, capping at $15. Across the state, the minimum wage varies geographically, and by employer size within New York City.

Ohio

$8.30 for businesses with annual sales over $299,000
$7.25 for businesses with annual sales under $299,000

Change due to consumer price index.

Rhode Island

$10.10

Change due to ballot/legislature.
Set to increase to $10.50 beginning 2019.

South Dakota

$8.85

Change due to cost of living.

Vermont

$10.50

Change due to ballot/legislature.
At the start of 2019, the rate will increase annually by the smaller of two options: the consumer index price or 5 percent. The minimum wage cannot be decreased.

Washington

$11.50

Change due to ballot/legislature.
Set to increase to $12 in 2019 and $13.50 in 2020.

The post These 18 States Are Raising the Minimum Wage in 2018 appeared first on MagnifyMoney.

Minimum Wage Can’t Cover Rent for a 2-Bedroom Apartment in Any State

housing-wage

You probably won’t be surprised to hear that there isn’t a single state in the U.S. where a worker earning minimum wage can afford the rent for a two-bedroom apartment — or, for that matter, a one-bedroom apartment. You might be surprised to learn that there isn’t a state where renters earning average pay can afford a two-bedroom apartment, either.

The National Low Income Housing Coalition crunched the numbers recently and found that a toxic mix of stagnant wages and rising rents has made things really difficult on a wide swath of U.S. wage-earners. It calculated a “housing wage” by determining how much workers would have to earn hourly to afford a “fair market rent” apartment for 30% of their income. By that measure, the national housing wage is $20.30 for a two-bedroom unit and $16.35 for a one bedroom — both far above even recently increased minimum wages.

But in many parts of the country, the numbers are even bleaker. Near Washington, D.C., the two-bedroom rental wage is about $31 an hour. In New York, it’s $27. In Maryland, it’s $26. In fact, in six staes and D.C., the housing wage is north of $25 an hour, the report says.

Another way of expressing the same problem: Using the national rates, a worker earning the federal minimum wage of $7.25 per hour would need to work 2.8 full time jobs, or approximately 112 hours per week, to afford a two-bedroom apartment. That renter would need to work 90 hours to afford a one-bedroom, according to the report.

“In only twelve counties and one metropolitan area is the prevailing minimum wage sufficient to afford a modest one-bedroom apartment,” the report says. Those regions are all in West Virginia and Washington state.

Meanwhile, the average hourly wage of renters in the U.S. is $15.42, which is $4.88 less than the two-bedroom housing wage.

“In no state is the mean renter wage sufficient to afford a two-bedroom apartment at the fair market rate,” the report points out.

Here’s one example of the troubling numbers at work:

In Washington state, fair market rent on a two-bedroom apartment is $1,203. That means a worker needs annual earnings of about $48,000 to afford that unit, or $23.13 per hour. Based on the state minimum wage, a worker would need 2.4 jobs full-time jobs to afford that. The real average renter wage in Washington is just $16.69, meaning a worker with an average-pay job needs 1.4 jobs to afford a two-bedroom place. In King and Snohomish counties, the region’s most expensive areas, the housing wage is much higher: $29.29.

Part of the problem is skyrocketing rents due to high demand and low supply. Vacancy rates are at their lowest levels since 1985, and rents have risen at an annual rate of 3.5%, the fastest pace in three decades, according to the housing group.

Another part of the problem I’ve written about before: Builders are less interested in constructing medium-prices housing at the moment for numerous economic reasons, preferring mostly high-end construction. This impacts availability of starter homes and rental units.

The National Low Income Housing Coalition says it is using a trust fund to help communities build and rehabilitate affordable rental homes.

“It is also critical to preserve and improve the nation’s public housing stock, expand the number of housing vouchers, and increase funding for other programs providing affordable housing to truly end this crisis,” the report says.

What is the housing wage for your state? You can find out on the map on this page. Remember that your earnings are only one of many things that determine your ability to find housing. Your potential landlord will probably look at a version of your credit report as part of your rental application, and bad credit rating or a history of payment problems could make it harder to find a place to live. A past eviction could be really problematic, as well, though it may not be a deal breaker.

It’s a good idea to review your credit before looking for housing, so you can check it for errors as well as be upfront about anything a landlord may find during a credit review. To keep track of where you stand, you can get a free credit report summary, updated monthly, on Credit.com.

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Image: Steve Debenport

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5 Ways Your Money Could Be Affected By a Bernie Sanders Presidency

Bernie_Sanders

It may seem like it’s been going on forever, but the 2016 presidential election is finally getting started, for real. Several months of primary elections begin Feb. 1 with the Iowa caucus, and soon enough, we’ll know who will be on the general election ballot come November.

One of those people could be Sen. Bernie Sanders (D-Vt.). Whether or not you’re feeling the Bern, it’s important to know how a Sanders presidency could affect you and your money. Like all presidential candidates, Sanders has identified many things he’d like to change about life in the U.S. There’s no way to know how many of his proposals would become reality if he’s elected — making such changes is a lot more complicated than proposing them — but several have the potential to significantly impact Americans’ personal finances. (We’ll be covering other candidates’ impact on your money in the next few weeks.)

Here are some of the main issues Sanders would like to address and how it could impact your finances.

1. Single-Payer Healthcare

There’s a lot of debate over how a single-payer healthcare system would affect the average American’s budget, because overhauling the system would be complicated and therefore costly. Without getting into the details (partially because Sanders hasn’t shared all of those yet), here’s what he’s proposing: Sanders is calling it his “Medicare for All” plan, and it aims to simplify the process of getting and paying for healthcare while detaching insurance from employment.

“As a patient, all you need to do is go to the doctor and show your insurance card,” reads Sanders’ website. “Bernie’s plan means no more co-pays, no more deductibles and no more fighting with insurance companies when they fail to pay for charges.”

Sanders plans to pay for the program, which his campaign estimates to cost $1.83 trillion annually, through a tax increase on those making more than $250,000 a year, premiums paid by employers and some households (dependent on income), other tax adjustments and program savings.

2. A $15 Minimum Wage

Currently, the national minimum wage is $7.25 per hour. Sanders wants to raise it to $15 per hour over the next several years. For people working minimum wage jobs, that could make a significant difference in their earnings and overall financial health. At the moment, only Emeryville, Calif., comes close with its $14.44 minimum wage, though San Francisco and Seattle have plans in place to implement $15 minimum wages in the next several years.

3. Paid Family Leave & Sick Days

Maternity leave, paternity leave and medical leave are hot topics in politics right now. Many parents don’t have the option of taking paid time off to care for new or sick children, and for those that do, it’s often an unaffordable one. Sanders proposes 12 weeks of paid family or medical leave for all U.S. workers, as well as 7 days of guaranteed paid sick days.

4. Free College

Sanders has outlined six steps he would take to making college debt-free. One of those ideas is to eliminate tuition at public colleges and universities throughout the country. For the 2015 to 2016 school year, the average in-state tuition at a public institution cost $9,410, according to the College Board, which is a 13% increase from the previous academic year. Even with the other costs of education beyond tuition, eliminating that expense could make a college degree much more affordable.

The entire plan is estimated to cost $75 billion annually, according to Sanders’ campaign website. He plans to pay for the plan by imposing what is essentially a sales tax on stocks and other investment products.

5. Student Loan Refinancing

Part of the problem with high tuition costs is the student loan debt it generates. There’s more than $1.3 trillion in outstanding student loan debt in this country, and it continues to grow as new borrowers take on loans and current balances accrue interest.

Those interest rates are a huge point of contention in the student loan world. Student loan rates are high by most consumer loan standards, and for the most part, borrowers are stuck with them. Sanders not only wants to cut interest rates in the first place, he also proposes making refinancing available so borrowers with high rates from many years ago can take advantage of today’s lower rates. (You can see how your student loan debt may be affecting your credit scores by viewing your free credit report summary, updated each month, on Credit.com.)

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Image: andykatz

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