In his State of the Union address Tuesday, President Trump touted a “blue collar boom,” noting that wages “are rising fastest for low-income workers.”
He’s correct, but Trump left out one thing: a large portion of those gains can be traced to minimum wage increases in more than half the states.
The median wage for the bottom fifth of workers has climbed much more sharply in states that have raised their pay floors than in states that haven’t, according to a study provided exclusively to USA TODAY by the National Employment Law Project (NELP).
During his presidential campaign, Trump at times advocated keeping the federal minimum at $7.25 an hour and other times said that was “too low.” In July, the Office of Management and Budget opposed a House-passed bill that would more than double the U.S. base wage to $15.
The administration’s “efforts to reduce taxes, eliminate regulations, and implement fair trade deals are driving economic growth and increasing workers’ take-home pay far more effectively and efficiently than legislation like” the house bill, the OMB said. .That measure did not come up for a vote in the Senate, where Republicans have opposed a minimum wage hike for years.
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But in the 26 states that lifted their base wages at least once from 2013 to 2018 — real or inflation-adjusted — median hourly pay rose 3.8% from the end of the recession in 2009 through 2018, according to a NELP analysis of Labor Department data. In the 24 states without a minimum wage hike, real median pay fell half a percentage point, the NELP figures show.
That trend appeared to continue in Trump’s administration. From May 2017 to May 2018, the latest data available, real wages rose 2.4% for the bottom fifth of workers in states with minimum wage increases versus 0.26% for such workers in states that kept their pay floors unchanged.
More broadly, real pay for the bottom fifth of workers nationally increased 3.6% from 2009 to 2018 while wages for all other workers were stagnant, the NELP figures show.
“The big increase in low-wage workers’ pay is largely the result of the fight by low-paid worker to raise the minimum wage across the country,” says Irene Tung, senior researcher and policy analyst at NELP.
Strikes by fast-food and other workers since 2012 helped spark a wave of state minimum wage hikes in recent years.
In South Carolina, there’s no state minimum wage and so employers must comply with the federal minimum of $7.25 an hour. Tina Watson, 41, of Holly Hill, says her $8 hourly pay at a local Wendy’s isn’t enough to support her and her 11-year-old son.
“It’s a struggle every month,” says Watson, who works 20 to 30 hours a week and receives food stamps. “I shouldn’t have to decide which bills to pay.”
Periodically, she says, her electricity is turned off for nonpayment and she has to borrow money from friends or relatives to turn it back on. She also can’t afford to take her son on trips or pay fees so he can play in a basketball league.
“We can have more, we deserve more,” she says. “I would like a raise.”
Tung acknowledges other forces are pushing up salaries across the economy, particularly a 3.6% unemployment rate that’s just above a 50-year low and making it harder for employers to find workers. But she says the minimum wage gains are the biggest factor.
The White House did not directly to respond to a message seeking comment on that claim.
But Michael Saltsman, research director for the Employment Policies Institute, which is backed by the restaurant industry, says the increases in hourly pay don’t account for restaurants, retailers and other businesses that have shut down or reduced worker hours because of the minimum wage increases. He also notes that some states simply have bumped up their pay floors based on cost-of-living increases, which are generally small and likely not responsible for statewide pay gains for low-wage workers.
Tung responded that the disparity between states with and without minimum wage increases would have been even greater if she had excluded states raising their pay floors because of cost-of-living increases.
This year, 24 states and 48 cities and counties have raised their minimum wages on or about January 1 — because of legislation, ballot initiatives or automatic inflation adjustments — or will do so later this year. The number of cities and counties with at least a $15 pay floor is set to double this year to 32.