Across America, the minimum wage is changing. Many of the changes were made on January 1st of this year and are already in effect. But what trends are there to watch out for? Here’s what you need to know about what’s happening and what’s coming up next.
Federal minimum wage remains unchanged since 2009 at $7.25, and this seems unlikely to change in the next year. The changes to minimums have happened mostly at the state level. 21 states have implemented minimum wage raises in 2017—that’s over 46% of the U.S. population experiencing a minimum wage increase just this year. In addition to state-level changes, the U.S. Department of Labor has enacted legislation that federally-contracted employees must be paid at least $10.20 an hour. Tipped federal employees with contracts must be paid a cash wage of at least $6.80 an hour.
Large municipalities are also making minimum wage shifts. In some states, minimum wage may vary depending on what city you’re in. Los Angeles, for example, has a higher minimum wage than the rest of California. Several factors can apply to this with high cost of living tending to be the major deciding factor. If you live in one of these cities, you might be dealing with a different minimum wage change than the rest of your state. Some big cities to watch out for are New York, Washington D.C., Seattle, San Francisco, and Los Angeles.
Higher minimums are on the horizon. While laws are changing, you may also be facing market competitors that are raising their own wages. The “fight for $15” has gone national, and businesses of all sizes are responding. The dropping unemployment rate, now below 5%, is creating jobs that stay open longer and longer. The competition for lower-level employees is heating up. In October, Starbucks raised wages for workers in all their stores in an effort to meet demand.
No matter where your business is located, minimum wage changes are likely not too far down the road for you. Stay competitive, attract the best and brightest, and keep their pre-employment screening and onboarding a breeze. Contact ClearStar to learn how we work with recruiters to help you bring on and retain the best talent.