Times Have Changed for State Minimum Wages

State minimum wage increases were becoming law at a rapid rate in recent years, especially before July 2007 when the first federal minimum wage increase in 10 years went into effect.

The momentum accelerated in November 2006 when minimum wage increase initiatives in six states made it to the ballot and all six of them passed.   All of these ballot measures also included an automatic annual adjustment for inflation.

In the meantime four additional states had passed annual adjustments to the minimum wage.   Currently there are 10 states with annual inflation adjustments:

  • Arizona
  • Colorado
  • Florida
  • Missouri
  • Montana
  • Nevada
  • Ohio
  • Oregon
  • Vermont
  • Washington

All of these adjustments occur on January 1 except for Nevada, which happens on July 1.

For several years all of the states with the annual adjustment for inflation increased their minimum wages.   But it all began to change as the economy slowed down.

This became obvious as 2009 drew to a close and the nine states whose minimum wage is adjusted for inflation every January 1 determined that the annual rate of inflation had decreased—something that had seemed unthinkable a few years earlier.

Since Colorado is the only state in this group whose minimum wage law allows wage declines, it now has the distinction of being the first state to decrease its minimum wage since the federal minimum wage was adopted in 1938.

The other states that adjust their minimum wage every January 1 would have been in the same situation if their laws allowed it.   Instead the end result was that not one state with an automatic inflation adjustment clause increased its minimum wage for 2010 in January.

Besides Colorado, only two of these states—Arizona and Oregon—had mandatory changes in their minimum wage posters for 2010, and these were text changes only rather than the wage rates themselves. These changes did affect the state labor law posters.

If you would like more information about your state minimum wage poster, go to postercompliance.com/labor-law-posters/minimum-wage-poster/ or call Poster Compliance Center at 1-800-322-3636.