Lower wage earners in half the country will have a little extra cause to celebrate the advent of 2022 as widespread increases to minimum wage rates are poised to take effect in the coming year.
But, the thousands who toil for hourly rates at or near the $7.25 minimum in Utah will not be among them.
A report released earlier this month by payroll experts at Wolters Kluwer Legal & Regulatory U.S. identified 26 states that have announced raises to minimum wage rates in 2022. Utah was among 14 states that, as of Jan. 1, 2021, remained at the federal minimum wage rate of $7.25, according to U.S. Department of Labor data. Five states have no minimum wage requirements, and two states have rates set below the federal minimum.
On Jan. 1, 2022, California will become the first state to mandate a minimum wage of $15 per hour, and Washington state isn’t far behind with its new minimum of $14.49 per hour going into effect the same day.
While most states are making changes that fall well below those rates, some municipal governments have carved out even higher requirements, with West Hollywood, California, set to have the highest minimum wage rate in the country, $17.64 per hour for hotel workers, as the New Year begins.
Researchers at Wolters Kluwer said while some of the increases going into effect in 2022 have been scheduled for years, conditions wrought by the COVID-19 pandemic have pushed other states to take action on wage issues.
“These minimum wage increases indicate moves toward ensuring a living wage for people across the country,” said Deirdre Kennedy, senior payroll analyst at Wolters Kluwer Legal & Regulatory U.S., in a statement published with the report. “In addition to previously approved incremental increases, the change in presidential administration earlier this year and the ongoing coronavirus pandemic have also contributed to these changes.”
Not all state-level changes extend to every wage earner, however. California’s new rate only applies to companies with 26 or more employees, with a slightly lower rate of $14 per hour for smaller employers. Maryland also has a tiered plan in place for 2022, with a minimum wage of $12.50 per hour for larger employers and $12.20 for smaller companies.
Some states have also embraced targeted minimum wage rates by industry. That includes New York, where workers in fast-food restaurants are guaranteed $15 per hour and airport employees have an $18 per hour minimum wage.
Utah has remained at the $7.25 minimum set by the federal government since 2009, and multiple attempts to raise that rate via new state legislation have fallen short of finding support, including a proposal considered during the general legislative session earlier this year.
Rep. Clare Collard, D-Magna, proposed a tiered increase to Utah’s minimum wage that would have moved the rate to $15 per hour in annual increments over four years. Collard’s HB284 earned a committee hearing but made it no further after the House Business and Labor Committee voted 10-3 to table the measure.
During that hearing in late February, Jordan Hess, vice president of the St. George Area Chamber of Commerce, argued it should remain the free market that makes those decisions and a statewide mandated minimum would hurt Utah’s rural areas.
“We don’t feel that the government should set those wages. The free market economy that our country has been built on, although imperfect, has raised more people out of poverty than any other economic system in the history of the world,” he said.
“And a $15 minimum wage could decimate a lot of our small businesses. ... If $15 an hour is great for Salt Lake County, great. Well, that’s not gonna work in Washington County,” Hess said.
But Collard told the Deseret News this week that she will bring back a revised proposal in the 2022 session and remains convinced that increasing the minimum wage, which would impact the earnings of some 19,000 Utahns, is a move that will bear direct benefits for those individuals, their families and the overall state economy.
“When you start to think about $7.25 an hour, the mindset has been these are for high school kids and people working their first jobs, but that’s just not true,” Collard said. “There are families trying to survive on these jobs, and some are working two or three to make ends meet.
“When people make more money they raise their standard of living and put more money into the economy. It’s going back into the economy and enabling people to survive.”
Proposed changes to minimum wages have also been a hot-button issue among federal leaders.
While an attempt to push a new, $15-per-hour national minimum wage rate by President Joe Biden was stricken from a COVID-19 stimulus spending package early this year via procedural maneuvering, Utah GOP Sen. Mitt Romney joined colleague Sen. Tom Cotton, R-Ark., in unveiling a proposal in February that would move the federal rate to $10 per hour, along with some new, more stringent requirements for screening employees for legal working status.
Romney said his Higher Wages for American Workers Act is aiming to raise the living standard of those earning minimum wages and would also incorporate an indexing component to ensure that, moving forward, the rate changes as inflation impacts how far those earned dollars go.
“For millions of Americans, the rising cost of living has made it harder to make ends meet, but the federal minimum wage has not been increased in more than 10 years,” Romney said in a statement in February. “Our legislation would raise the floor for workers without costing jobs and increase the federal minimum wage to $10, automatically raising it every two years to match the rate of inflation.”
Mark Knold, chief economist for the Utah Department of Workforce Services noted wages have been on the rise in Utah, and particularly so for those in the lower-earning tiers, in part driven by critical labor shortage issues.
“National data speaks to this,” Knold said. “The highest wage gains have been down in those lower skilled, lower paying areas. That’s where the big shortage of workers is.
“The higher skilled, higher education positions are seeing a 3% to 3.5% increase, but down in the lower skilled, manual labor areas, we’re approaching 15% wage gains over the last year, year and a half.”
But even in lieu of state or federal government-driven wage increases, hourly rate hikes are on the rise for many private employers facing increasing labor market competition.
While this year marks the first time that the average wage of restaurant and supermarket workers rose above $15 an hour, according to the Bureau of Labor Statistics, CNBC reports other employers have surpassed the $15 benchmark already.
Amazon has paid its workforce at least $15 an hour since 2018 and began offering new hires an average of $18 an hour this September. Costco raised its minimum wage to $17 an hour in October. Full-time employees of crafting retailer Hobby Lobby will earn at least $18.50 an hour starting Jan. 1. T-Mobile is paying its 75,000-person workforce at least $20 an hour. And Bank of America has pledged to pay hourly workers $25 an hour by 2025.
“It’s a job-seekers’ market, which means competition to keep and find top talent is competitive — and as a great employer, we like it that way,” T-Mobile CEO Mike Sievert wrote in a letter to employees announcing the wage hike on Dec. 10, according to CNBC.