The lack of significant wage growth in recent years is prompting more state and local governments to take matters into their own hands by raising minimum wages. There is a federal minimum wage, of course, but Congress is not presently poised to consent to an increase in this $7 dollar 25 cent minimum wage. So mayors and governors are taking matters into their own hands.
As reported in the New York Times, this November, ballot measures in San Francisco and Oakland, California will allow voters to decide on raising their cities’ respective minimum wages. In San Francisco, the push is for a $15 an hour wage by 2018, up from less than $11 today. Oakland doesn’t presently have its own minimum wage, but has set a goal of 12 dollars and 25 cents an hour by 2015. In Chicago, city aldermen have proposed a $15 minimum wage by 2016 for large employers.
In Los Angeles, the City Council has called for a minimum wage of 13 dollars and 25 cents per hour by 2017 and for a study to chart a path exceeding 15 dollars by 2019. One of the most interesting things to watch is the extent to which these and other moves produce growing wage inflation in America and the extent to which monetary policymakers will respond in the form of higher interest rates.
