State wage hikes will fatten worker paychecks by $5 billion

More than 4.5 million American workers will get a fatter paycheck starting this week, and the raise has nothing to do with the sweeping tax overhaul bill approved last month.

Eighteen states and 19 cities, including the District of Columbia, will boost the statutory minimum wage effective in January, according to the National Employment Law Project. That will provide workers at the bottom of the income ladder with a combined wage increase of more than $5 billion next year, according to figures compiled by the Economic Policy Institute.

Starting Jan. 1, Maine boosted its bottom pay rate by $1, to $10 an hour, an increase that will benefit an estimated 59,000 workers. California increased its minimum wage by 50 cents, to $11 an hour, helping more than 2 million workers.

In most states, the increases are the result of recent laws that raise the pay rates for those at the bottom of the income ladder. Others have laws on the books that automatically boost the minimum wage to keep up with inflation.

That’s not the case with the federal minimum wage, which is currently $7.25 an hour. Because it’s not pegged to inflation, the buying power of a minimum wage paycheck has been falling for the last 50 years, despite periodic increases.

In 1968, the statutory minimum wage of $2 an hour was worth about $10.90 an hour in 2017 dollars.

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