Minimum Wage Boost & Social Security COLA Bump Could Help Fight Inflation

Posted by Employer Flexible on July 15, 2022
Employer Flexible

Americans at all ends of the spectrum are looking for ways to get more cash in their wallets to fight the effects of the highest inflation since 1981.

For some low wage earners, minimum wage rate increases in some states and jurisdictions that went into effect July 1, 2022, will provide some immediate relief.

Meanwhile, those drawing social security checks could see double digit cost of living increases in 2023 but the actual increase will not be announced until October 2022.

Several State, Local Minimum Wage Rates Increased July 1, 2022

The law firm Ogletree Deakins reported that several state and local minimum wage rates increased on July 1, 2022.

Florida workers, however, will have to wait a few more months before seeing a minimum wage rate increase.

“Increases to minimum wage rates for nonexempt employees and tipped employees in Florida will occur later in the year, on September 30, 2022,” wrote Charles E. McDonald III and Nancy S. Lester.

Mid-year 2022 minimum wage increases that went into effect July 1, 2022, include:

  • California: Berkley raised rate from $16.32 to $16.99; Emeryville raised rate from $17.13 to $17.68; Los Angeles (city) raised rate from $15.00 to $16.04; Los Angeles (county) raised rate from $15.00 to $15.96; Malibu raised rate from $15.00 to $15.96; Pasadena raised rate from $15.00 to $16.11; Santa Monica raised rate from $15.00 to $15.96; West Hollywood raised rate from $15.50 to $16.50 (50 or more employees), $16.00 (49 or fewer employees) and $17.64 to $18.35 (hotel employers).

  • Connecticut: Statewide rate raised from $13.00 to $14.00.

  • District of Columbia: Districtwide rate raised from $15.20 TO $16.10. Tipped employees minimum cash wage raised from $5.05 to $5.35.

  • Illinois: Chicago raised rate from $15.00 to $15.40 (21 or more employees); $14.00 to $14.50 (4 to 20 employees); Cook County raised rate from $13.00 to $13.35. Tipped employees minimum cash wage raised from $9.00 to $9.24 (21 or more employees); $8.40 to $8.70 (4 to 20 employees); Cook County $6:30 to $7.40.

  • Maryland: Montgomery County raised the rate from $15.00 to $15.65 (51 or more employees); $14.00 to $14.50 (11 to 50 employees); $13.50 to $14.00 (10 or fewer employees).  

  • Minnesota: Minneapolis raised rate from $14.25 to $15.00 (more than 100 employees); $12.50 to $13.50 (100 or fewer employees); Saint Paul raised rate from $12.50 to $15.00 (10,001 or more employees); $12.50 to $13.50 (101 to 10,000 employees); $11.00 to $12.00 (6 to 100 employees); $10.00 to $10.75 (5 or fewer employees).

  • Nevada: Statewide raised rate from $8.75 to $9.50 (employers offering qualified health insurance benefits); $9.75 to $10.50 (employers not offering qualified health insurance benefits).

  • Oregon: Statewide raised rate from $12.75 to $13.50; Portland metro employees raised rate from $14.00 to $14.75; employers in nonurban counties raised rate from $12.00 to $12.50.

That Florida minimum wage increase on Sept. 30, 2022 will have statewide rates raised from $10 to $11 and statewide minimum cash wage for tipped employees raised from $6.98 to $7.98.

California Statewide Minimum Wage Hike to $18 Fails to Make Ballot

A proposal to raise California minimum wage rates statewide to $18 per hour failed to get enough signatures to appear on the state’s November ballot, according to the Los Angeles Times.

Currently the state minimum wage is $14 an hour for small employers and $15 for employers with 26 or more workers.

Nationally the minimum wage rate remains at $7.25 and has not increased since 2009 and has increased just $2.10 per hour (from $5.15 to $7.25) in the last 25 years.

Efforts to push through a “Raise the Wage Act” in congress stalled in 2021 and has not gained any more traction in 2022. The legislation would raise the federal minimum wage to $15 per hour over a five-year period and eliminate the tipped minimum wage.

“National business groups, including the U.S. Chamber of Commerce, the National Restaurant Association, and the International Franchise Association, further argue that raising the federal minimum wage to $15 on already-struggling small businesses attempting to emerge from the pandemic would force them out of business,” reported Shannon Meade, Executive Director of the Workplace Policy Institute. “Additionally, the nonpartisan Congressional Budget Office reported that increasing the minimum wage to $15 an hour by passing the “Raise the Wage Act” would, on net, reduce employment by approximately 1.4 million workers.”

Social Security Checks Could Rise 10.8 Percent in 2023

Americans that depend on their social security checks could be in for a big cost of living adjustment in 2023 with a recent analysis predicting as high as a 10.8 percent monthly increase.

“That would be the highest cost-of-living adjustment, or COLA, in four decades, according to the nonprofit Committee for a Responsible Federal Budget (CRFB), which produced the analysis at the end of June,” reported Fortune.

Social Security’s COLA for 2022 was 5.9 percent, the highest increase since 1982, but not enough to keep up with inflation which was running at 8.6 percent in May.

The 2023 Social Security COLA will be pegged to the third quarter performance of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

The CPI-W in May was running at an increase of 9.3 percent year over year.

The Social Security Administration will make its official COLA announcement in October, basing that decision, according to CBS News, on the previous three months of inflation data from the CPI-W.

The Senior Citizens League, a nonpartisan senior group, estimates that the 2023 COLA could be 8.6 percent.

CNBC reported that the Social Security Administration’s chief actuary, Stephen Goss, said that next year’s COLA could be “closer to 8 percent,” more than twice the 3.8 percent estimate in the agency’s annual trustees report, which was based on data through mid-February.

Topics: Human Resources