In the past year, we’ve seen a significant increase in state and local jurisdiction minimum wage laws. To date, 29 states, six counties and 32 cities have minimum wage laws.
Here are a few reasons why:
Inaction at the Federal Level
First, states, counties and cities, who don’t see any movement at the federal level, are implementing minimum wage laws in their jurisdictions.
For example, the federal minimum wage hasn’t increased since 2009. Local jurisdictions can pass and update laws at a faster pace than the federal government. Federal laws have a longer approval process, as a bill needs to pass in both houses of Congress and must be signed by the president before it officially becomes a law.
At the state level, it’s simply approved by the state legislature and put into effect with the governor’s signature.
Also, passing laws at higher levels takes more time because of differences in politics and other factors, which leads us to our next point.
Demographic Differences Acknowledged
The variety of demographics across the U.S. makes it challenging to pass a law at the federal level. This is especially the case with minimum wage.
Minimum wages are changing to account for living factors specific to the geographic location. For example, major metropolitan areas tend to have higher costs of living, making higher wages a necessity.
States are Concerned About Businesses
Because of the increase in county and city minimum wage laws, some states have countered with preemption laws. These preemption laws supersede county and city power over all, or a limited subset of, workplace laws.
Why? Some states are concerned that multiple minimum wage requirements – federal, state, county and city – create confusion for employers. Plus, with higher minimum wages in certain areas, states are wary employers may take a financial hit and decide to close or move locations to lower minimum wage areas.