Washington state has both strong economy, higher minimum wage

A higher minimum wage is not incompatible with a strong economy, and Washington state is a prime example. A recent MinnPost article finds that Washington’s economy is thriving – and it has the highest minimum wage in the country. Considering the attention that the minimum wage will likely receive during this upcoming legislative session in Minnesota, it’s an important message to consider.

Washington and Minnesota are doing well compared to the rest of the nation. Both have lower poverty rates and higher median incomes than the national averages. The article describes both states as having diverse economies with concentrations in future-oriented areas: high technology for Washington and medical technology for Minnesota.

However, Washington and Minnesota have very different wage floors. In the late 1990s, voters in Washington passed an initiative that raised their minimum wage in several steps, then indexed the minimum wage to inflation. As a result, the minimum wage there stands at $9.32 an hour, which gives the state the highest minimum wage in the nation. Minnesota, in contrast, is one of a small number of states with a minimum wage lower than the federal minimum wage.

The lesson for Minnesota is clear: states that set a higher wage floor for their workers can thrive economically. We’ve reported before that a minimum wage increase would increase earnings for many Minnesota workers. Increasing the minimum wage to $9.50 an hour by 2015 would boost wages for about 357,000 workers and increase their annual wages by $472 million.

-Caitlin Biegler

About Caitlin Biegler

Caitlin Biegler is the Minnesota Budget Project’s policy analyst. She researches and writes about state tax and budget issues. Caitlin holds a Master of Public Policy degree from George Washington University in Washington, DC; and a Bachelor of Science degree in Public Health from Tulane University in New Orleans, LA. She interned at the DC Fiscal Policy Institute in Washington, DC, Third Way in Washington, DC, Lutheran Social Services, and the Alabama State Office of Primary Care and Rural Health.
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