UPDATE (November 9): With most votes counted, voters in Arizona, Colorado, Maine and Washington State have all approved the ballot measures outlined below. Generally by wide margins from the mid 50’s to 60%. In South Dakota, by a wide margin of 71% to 29% (with 99% of precincts reporting) voters rejected a measure to *lower* the minimum wage for people under age 18.
President-Elect Trump has expressed support for an increase in the Federal Minimum Wage to $10 per hour. However, all of the measures outlined here were for higher minimums ranging from $12 – $13.50 per hour. Further, CA, NY and DC have already approved $15 per hour, as have a number of large cities. As a result, the states have taken the lead on this issue and have moved to support higher minimum wages, and generally at levels above any likely Federal Increase that Trump may support.
Original Blog Post Follows:
Ballot Initiatives are on the ballot in four (4) states (Arizona, Colorado, Maine and Washington State) today to raise the Minimum Wage. Recent polls indicate all of these measures are likely to be passed with strong support. Such measures have consistently received strong support from voters. In all, fifteen states have approved such ballot initiatives since 2000. As a result a majority of states already have a mandated Minimum Wage above the Federal Minimum Wage.
Fully 58% of Americans support a higher minimum wage than the Federal Standard (per CNN). Both Presidential Candidates support an increase in the Minimum Wage, with $10 per hour favored by Trump and $15 per hour for Clinton. Support for minimum wage increases have done well, even in Red States. In 2014 four states (Alaska, Arkansas, Nebraska, and South Dakota), all solidly “Red”, passed such measures.
Momentum supporting increases has been even stronger in a number of cities around the nation, with 15 cities already approving increases to $15 per hour, and 6 additional cities considering similar measures.
November 8 Ballot Initiatives
In Arizona, Proposition 206 will raise the Minimum Wage to $12 per hour by 2020, and mandate paid time off for sick days. Employers would, however, maintain a tip credit of $3 per hour.
In Colorado, Amendment 70 will raise the Minimum Wage to $12 per hour by 2020. Employers would retain a tip credit of $3.02 per hour.
In Maine, Question 4 would raise the Minimum Wage to $12 per hour by 2020 and mandates a cost of living increase beyond that tied to the Consumer Price Index. More significantly for restaurateurs, the measure would eliminate the tip credit by 2024. By that year employers would need to pay all employees the mandated minimum wage, even if substantial amounts of employee pay came from tips. Presently, employers can pay one-half the minimum wage for employees receiving tips.
In Washington State, Initiative 1433 would go further, raising the minimum wage to $13.50 by 2020 and requires that employers provide mandatory sick leave. State law already has eliminated the tip credit. In Seattle, the Minimum Wage has already been raised to $15 per hour.
Of note, voters in South Dakota will consider an initiative labeled as “Referred Law 20”. If passed, voters will endorse Senate Bill 177 (SB177), that would *lower* the Minimum Wage for persons under 18 years of age from $8.50 to $7.50 per hour. Further, the Minimum Wage would not be tied to indicators such as the Consumer Price Index, so no provisions would be in place for future increases in the Minimum Wage. The state’s tip credit would be preserved, that stipulates that employees that receive tips need only receive a Minimum Wage equal to 50% of the Overall Minimum Wage.
Other 2016 Developments
Initiatives to raise the Minimum Wage did not go onto the ballot in California and Oregon after the State Legislature in both states acted earlier this year to raise the Minimum Wage. In California, the increase was to $15 per hour. California, along with New York and the District of Columbia, now have a Minimum Wage of $15 per hour, the same rate advocated by Hillary Clinton as the new Federal Minimum Wage.
A number of other states rejected ballot measures to raise the Minimum Wage. They are as follows:
Alabama – Both Houses of the State Legislature must approve, by a 3/5th (60%) vote, to send the measure to the ballot. The legislature did not act on the measure.
Florida – The Minimum Wage Increase Initiative (#15-09) was an initiated constitutional amendment that did not make the Florida ballot on November 8, 2016. The measure would have increased the state’s hourly minimum wage to $10.
Missouri – The Raise the Minimum Wage Initiative did not make the November 8, 2016, ballot in Missouri as an initiated state statute. The measure, upon voter approval, would have raised the minimum wage.
Nevada – Minimum Wage Increase Initiative. Was withdrawn by its sponsor and did not appear on the ballot.
Ohio – The Ohio “Fair Wage” Amendment did not make the ballot. The organization supporting it failed to collect the required 305,591 signatures. They vow to do so at a future date.
South Carolina – the South Carolina Minimum Wage Increase Question was not put on the November 8, 2016, ballot in South Carolina as an advisory question. The measure, upon voter approval, would have advised the state legislature to increase the state’s hourly minimum wage to one dollar above the federal minimum wage. The measure was known in the legislature as Senate Bill 146.
Restaurateurs Should Brace for Labor Cost Increases
Cities and States (a majority of all 50) across the Nation have already mandated Minimum Wages above the Federal Mandated Level. Clearly, Populist Sentiment has taken hold in recent years and especially during the current election cycle. Ballot initiatives in Arizona, Colorado, Maine and Washington State to raise the Minimum Wage are all likely to pass on November 8, following a series of 15 wins (and no losses) for such ballot initiatives since 2000. Similar measures in a number of major cities have already gone further, to $15 per hour, with 6 more cities likely to follow suit. California, New York and the District of Columbia have already done so, and $15 per hour may be the near-term target should Clinton win the Presidency.
The tip credit is also increasingly losing support. States like California, which tend to lead longer-term trends, have already done away with it. The ballot initiative in Maine will do the same, and Washington State has already eliminated it, regardless of the outcome in the state’s ballot measure.
Restaurateurs should gird themselves for labor rate increases, and plan accordingly.