Nearly 10,000 Rhode Islanders are set to get an automatic raise beginning Wednesday as the state raises its minimum wage to $8 an hour.
The hike goes into effect New Year's Day, and will put Rhode Island on par with Massachusetts. Twelve other states will also start the new year with a higher minimum, including Connecticut, which is going from $8.25 to $8.70 an hour. New York is also set to increase its minimum wage to $8 effective Tuesday.
It's the second consecutive increase in Rhode Island. Lawmakers approved a 35-cent increase last year, the first time the wage had been raised since 2007.
Supporters said many Rhode Islanders are forced to work multiple minimum-wage jobs to afford rent, food and transportation. Opponents worry the increase could prompt small business owners to hire fewer workers.
According to a census analysis by the Economic Policy Institute, the increase in Rhode Island will directly benefit 9,000 workers who now make less than $8 an hour. Another 14,000 low-wage earners make just above the new minimum, but are expected to see raises when their pay scales are automatically adjusted upward.
State Sen. Erin Lynch and House Rep. David Bennett sponsored the increase in the General Assembly. Bennett, a Warwick Democrat, predicts the increase will be a boon for the state's economy, struggling with a 9 percent jobless rate that is the highest in the nation.
"The lower-wage residents in our state spend all of their money right here in Rhode Island," he said. "They don't go to Massachusetts, they don't go to Connecticut. They spend it right here. And it's not just young kids working these minimum-wage jobs. It's parents who need extra income. It's older people. It's people working two, three jobs."
Not everyone agrees the raise will be good for Rhode Island. Michael Saltsman, research director at an organization called the Employment Policies Institute, said his higher minimum wages can force businesses to either raise prices or cut hours or jobs for minimum-wage workers. He said a higher minimum can often mean higher unemployment for young workers.
"There is little doubt that raising the minimum wage has disastrous results for the most vulnerable jobseekers," he said.
The federal minimum is $7.25 an hour.
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