Minimum wage is going up, but that may not be a good thing.
As of January 1, 2023, the minimum wage will increase to $15.74. This is a $1.25 increase compared to the current minimum wage of $14.49.
On November 1, it was reported that the U.S. is dealing with a very high inflation rate at 8.5%. This was made official by The Consumer Price Index for the United States of America.
Each county in Washington will have a different minimum wage rate, but it has been decided that $15.74 is the starting rate for minimum wage beginning 2023 throughout the state.
The Seattle Post mentioned that the current minimum wage is $16.50 in the city, so by January the public can expect it to reach $17.75.
Each year an L&I is required to make a cost-of-living adjustment to the minimum wage based on the CPI-W.
L&I refers to the Washington State Department of Labor & Industries. The L&I decides which claims to pay and makes those payments. The CPI-W is the consumer price index (for Washington), which refers to the cost of goods and services for average consumers.
In 2022 www.ssa.gov said that the consumer price index for minimum wage earners increased 7.9% in the last 12 months.
Index levels fluctuate often, an index level is based on the price changes of goods and services. Since the pandemic, those numbers have been all over the place.
During the beginning of the pandemic a lot of things were flying off the shelves, so the demand for things like Lysol and medical masks was high. And typically, higher demand means higher prices.
Econ.net said it best, “Demand increase: Price increases, quantity increases; Demand decrease: Price decreases, quantity decreases. The way of a communist country.”
Consumer prices are rising quickly by historical standards.
So yes, the US is experiencing inflation: A whopping 8.5% out of 10%. But can the country expect a recession?
Many economists see the US entering a recession in the next 11 months, “Inflation has outpaced wage gains on an annual basis every month since April 2021,” as said in Bloomberg, an online blog about politics.
So, while people are getting excited about the extra $1.25, just remember that all consumer prices will continue to increase in some way.