Currently, 21 states including the District of Columbia have higher minimum wages than the $7.25 level that the U.S. government has installed at a national level. As states such as Maryland, Delaware, West Virginia, Hawaii, and Minnesota have now approved plans to increased the wage beyond the national minimum, the number of states that have set the wage above the government’s mandate will be over half of the country. There are 10 states (AZ, CO, FL, MO, MT, NV, OH, OR, VT, and WA) that have minimum wages that are linked to a consumer price index.
Washington and Oregon are presently among the only states with a minimum above $9.00. The graph produced from Bureau of Economic Analysis data below represents six states with separate minimum wage policies. Washington’s minimum currently stands at $9.32 with an adjustment used that is based on the consumer price index for urban wage earners and clerical workers for the prior year. Similarly, Oregon uses the U.S. City Average Consumer Price Index for All Urban Consumers for All Items in order to adjust for inflation, with minimum wage equaling $9.10. Unlike the other two, Tennessee is one of five states that has no set minimum wage, and therefore federal laws override to push wage to $7.25. Both Pennsylvania and Idaho have wages set at $7.25. The figure below was produced using statistics from the U.S. Bureau of Economic Analysis. The states in bold font are those that have their minimum wage at $7.25.
As seen by the figure, Oregon ($9.32), Washington ($9.10), and Tennesee ($7.25) have merged towards an equal upward-angeled slope above the United States’ current GDP trajectory. States such as Pennsylvania ($7.25) and Illinois ($8.25) have consistently followed with the overall GDP fluctuations of the overall country. Idaho ($7.25) has consistently been growing at less than the nation’s GDP average growth.
With minimum-wage states performing above, below, or even directly in line with the overall U.S. economy, it is difficult to use state data to predict whether an increase from the current national wage minimum would be beneficial to the overall country. Key economic and social developments in each state such as fracking and marijuana legalization must be examined and factored into their changes in GDP before any conclusion to this data can be made. Nevertheless, it seems as though economists will have to look elsewhere to find viable proof that a change in minimum wage would be practicable option or not.