As 2022 began, workers in 21 states saw a rise in their state’s minimum wage, with states enacting bumps ranging from cents to dollars per hour. But an increase in the minimum wage in Kansas doesn’t even appear to be on the table and despite tons of COVID relief, in 2021, members of the U.S. Senate failed on several occasions to pass an increase in the federal minimum wage.
ATTEMPTS TO RAISE THE FEDERAL MINIMUM WAGE
The federal minimum wage was first created in 1938 as part of the Fair Labor Standards Act, which originally set the minimum wage at $0.25 per hour. The federal minimum wage is not automatically indexed to inflation or any other economic indicator, which means that it takes an act of Congress to raise the minimum.
Historically, Congress has passed increases every few years to reflect inflation and the changing purchasing power of the dollar. But the last minimum wage increase took place in 2009 – 11 years ago – to $7.25 per hour, and the time between then and now represents the longest-ever period without an increase.
At its peak in 1968, the minimum wage was worth $12.77 in 2020 dollars. When the last minimum wage increase took effect in 2009, the wage was worth $9.22 per hour in 2020 dollars. This means that the real value of the current $7.25 wage is down 43% from its historical peak, down 21% since the last increase, and at one of its lowest-ever levels in recent history.
President Joe Biden and some progressive Democrats have previously advocated for a $15 federal minimum wage. By signing an executive order in April, Biden raised the minimum wage for federal contractors to $15. That increase will go into effect at the end of January.
However, attempts to bring a nationwide federal increase to fruition failed last February when the Senate parliamentarian ruled against including an increase in the minimum wage in the COVID relief bill. Following the Senate parliamentarian’s ruling, Independent Sen. Bernie Sanders of Vermont introduced an amendment in March to try to raise the minimum wage. While its chances of passage were already slim given the narrowly divided Senate, eight Democrats voted against the amendment.
Sen. Joe Manchin of West Virginia, one of the Democrats who voted against the amendment, told CNN’s Jake Tapper at the time that he’d like to see the federal minimum wage increased to $11 and then “it should be indexed for inflation, so it never becomes a political football again.”
The Congressional Budget Office estimated in 2019 that a $15 minimum wage “would move, on net, roughly 1.3 million people out of poverty.”
KANSAS VERSUS MISSOURI
The federal minimum wage is just one tool for increasing workers’ pay. Another major policy lever is state minimum wages and an overwhelming number of states have increased their minimum wage above the federal level. While many of the states that have raised their minimum wages have a higher cost of living, the real value of the minimum wage in Kansas relative to the state’s cost of living made Kansas’ minimum wage the 13th lowest in the country.
Missouri is one of several states that had a minimum wage increase at the beginning of this year. In 2018 Missouri residents passed a proposition that gradually increased the statewide minimum wage to $12 over five years. Last year that rate was $10.31 per hour with the approved proposition increasing the minimum wage 85 cents each year through 2023. All private businesses are required to pay the minimum wage, except retail and service businesses whose gross annual sales are less than $500,000.
At last year’s $10.31 per hour, the Missouri minimum wage compared to the state’s cost of living placed the state’s minimum wage as the 9th highest in comparison to the state’s cost of living.