In some battleground states, low-wage workers keep losing ground
Half of the eight battleground states in this year's U.S. presidential election use the federal minimum wage of $7.25 an hour, a rate that hasn't changed since 2009 despite a 47% surge in the cost of living since then. In essence, that means minimum-wage workers in those states have seen much of their purchasing power vaporized by inflation over the past 15 years.
Donald Trump's October 20 visit to a McDonald's location in Feasterville, Pennsylvania, where the former president served food to pre-selected supporters, has renewed public attention on how much low-income workers earn. Asked by CBS News reporter Olivia Rinaldi if he thought the minimum wage should be raised after spending time behind the counter at the fast-food restaurant, Trump sidestepped the question.
"Well, I think this. I think these people work hard. They're great," he said. "And I just saw something a process. It's beautiful. It's a beautiful thing to see. These are great franchises and produce a lot of jobs, and it's good and great people working here too."
Trump's campaign didn't immediately respond to a request for comment about the former president's views on the minimum wage.
Vice President Kamala Harris has stated that she wants to raise the nation's minimum wage, as well as the sub-minimum wage that is earned by tipped workers. Both Trump and Harris have proposed eliminating income taxes on tips as a way to boost earnings for people in the hospitality industry.
While the federal minimum wage has been frozen since 2009, 30 states have stepped in to boost wages for their lowest-earning workers, according to the left-leaning Economic Policy Institute. That's left 20 states still paying the federal baseline wage, representing annual earnings of $15,000. Those states are mostly in the South and Midwest, including the four battleground states that use the $7.25 an hour minimum: Georgia, North Carolina, Pennsylvania and Wisconsin.
Experts note that workers in these locations are at risk of falling behind people who reside in states providing a higher pay floor.
"It's ridiculous that Pennsylvania has a lower minimum wage than its neighbors as well as states like Arkansas, Florida and Nebraska, where voters had a chance to pass raises through ballot initiatives," Holly Sklar, CEO of Business for a Fair Minimum Wage, a group that advocates for higher pay, told CBS MoneyWatch.
Earning $7.25 an hour "is a poverty wage, and it's bad for business as well as workers," Sklar added.
The minimum wage versus inflation
The renewed focus on worker pay comes amid polling that shows many people continuing to struggle financially even as inflation fades and the job market continues to click.
A majority of Americans say they feel worse off than four years ago, according to Gallup, a pessimism that could sway their decisions in the November 5 election. And 6 in 10 voters describe the U.S. economy as either "fairly bad" or "very bad," according to CBS News polling.
That is likely tied to elevated prices caused by the hottest inflation in 40 years, which outpaced wage growth during the pandemic. Yet since May 2023, the typical worker's pay has outpaced inflation, boosting their purchasing power.
That isn't the case for workers who earn the federal minimum wage because it isn't indexed to inflation, a step that some states are now taking to ensure that people can keep up with the rising cost of living. If the federal minimum wage had been indexed for inflation, it would now stand at $10.61 per hour.
The four other battleground states have lifted their hourly minimum wage to about that level, or even higher:
- Arizona: $14.35 an hour
- Michigan: $10.33 an hour
- Nebraska: $12 an hour
- Nevada: $12 an hour
"In our region, the minimum wage has gone up in surrounding states but not in Pennsylvania," noted Keystone Research Center, a think tank for Pennsylvania-related issues, in a blog post. "Minimum-wage workers in Pennsylvania have also lost ground relative to workers in the middle of the wage distribution, that is, relative to the median wage."
