Millions of low-paid workers in Illinois, Maryland, New Jersey, and New Mexico will soon have higher wages and a better shot at economic success thanks to new state minimum wage increases. These pay hikes will especially help workers of color and women, who comprise a disproportionate share of low-wage workers.
Low wages make it hard for families to afford decent housing in safe neighborhoods, nutritious food, reliable transportation, and quality child care, as well as educational opportunities that can lift them toward the middle class. The wages of the least-paid workers are nearly the same as they were more than 40 years ago in inflation-adjusted terms (see chart).
While federal policymakers haven’t raised the federal $7.25-an-hour minimum wage in a decade, many states have acted on their own. Currently, 29 states plus the District of Columbia have higher minimums than the federal minimum. And in the last few years, an increasing number — including three of the four states that approved wage boosts this year — have moved toward a $15 minimum wage.
These wage increases will help the lowest-paid workers and their families, but state policymakers who want to build an economy that works for everyone also should create a state Earned Income Tax Credit (EITC) or strengthen one that’s already in place. Together, stronger EITCs and minimum wages are twin pillars of making work pay for low-wage families. They boost income, widen the path to the middle class, and reduce the gap between high- and low-income households. They particularly help women and communities of color see the fruits of their labor and share more fully in economic growth. And they help build a stronger future economy by putting children on a better path in life.