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Minimum wage milestone: Why Washington State surpassed $9 an hour

Minimum wage laws raised the wage floor in eight states as of Jan. 1. Washington now tops all states, at $9.04 an hour. Economic effects of raising the minimum wage are in hot dispute.

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Opponents of a wage boost argue that minimum-wage hikes have unintended consequences. "When you raise the price of something, including entry-level labor, you're going to decrease demand for it," Michael Saltsman, research fellow at the Employment Policies Institute, in Washington, D.C., told The Wall Street Journal on Dec. 1. 

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In a hurting economy, profit margins are razor thin for many businesses, and some say they will be forced to cut employee hours or consider raising workers’ share of employee-provided health care.

But there is no "evidence of any loss of employment or hours for the type of minimum-wage changes we have seen in the US in the last 20 years," says Arindrajit Dube, a professor of economics at the University of Massachusetts in Amherst.

If employers cut back on labor, it's generally because of poor economic conditions, not pay requirements, Mr. Dube told The Wall Street Journal.

What’s more, an increased minimum wage not only boosts wages for working families who are struggling to get by, but also stimulates economies because workers have more money to spend, according to EPI.

The institute estimates that more than $366 million will be injected into the economies of the eight states that raised the minimum wage this year. And in turn, EPI predicts, more than 3,000 full-time jobs will be created in those states as a result of the rise in the wage floor.

But Washington’s $9.04-an-hour minimum wage is just too high, isn’t it? Not really, historically speaking, writes David Cooper on EPI’s website.

The minimum wage has been considerably higher in years past. “In inflation-adjusted terms, the federal minimum wage was highest in 1968, at a value of roughly $9.85 per hour in 2011 dollars. So even at $9 per hour, the Washington minimum is well below historical highs, not to say anything of the federal minimum wage, which at $7.25 has declined in value by more than 26 percent since 1968,” writes Mr. Cooper.

Eighteen states and the District of Columbia set minimum wage rates above the federal minimum, 23 match it, and the other nine set rates below the federal minimum or do not have a minimum wage, according to the Department of Labor.

Georgia, Arkansas, Minnesota, Wyoming, and Puerto Rico all have state minimum wages set below the federal mark of $7.25 an hour, but most workers are covered by the national law.

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