20 US states to increase minimum wage in 2017: report

Washington, Dec 31 (IANS) Twenty US states and the District of Columbia will raise their minimum wages at the start of 2017, media report said.

The move will boost pay for about 4.4 million low-wage workers across the country, Xinhua news agency reported on Saturday.

The District of Columbia would raise its minimum wage by $1 to $12.5 an hour, the highest in the country, while the state of California would increase the minimum wage by 50 cents to $10.5 an hour, a move that would affect about 1.7 million workers, the Wall Street Journal reported.

In the state of Arizona, the minimum wage would go up $1.95 to $10 an hour, the biggest jump among the 20 states and one of the largest one-time increases ever enacted, the report said.

As the US labour market inches closer to full employment, low-income workers around the country continue to push states and businesses for an increased minimum wage.

In all, about 4.4 million US low-wage workers are slated to receive a raise in 2017 because they earn less than the new minimum in their respective states, the report said, citing research from the Economic Policy Institute.

US President Barack Obama has proposed raising the federal minimum wage to $10.10 per hour from the current rate of $7.25 for several years, but Republican lawmakers have so far blocked those efforts, saying it would add to the operating costs of business owners.

However, economists at the Peterson Institute for International Economics argued that raising the pay of the lowest-paid US private-sector workers "would not only reduce income inequality but also boost overall productivity growth, with likely minimum effect on employment in the current financial context."

It was, however, unclear whether the minimum wage increase across the country would help push up the US inflation to rise to the Federal Reserve’s target of 2 per cent, which could prompt the central bank to raise interest rates at a faster pace in 2017.

Fed officials earlier in December predicted that there would be three rate hikes in 2017, up from two rate hikes estimated in September.