- Rhode Island's governor just signed a bill that would raise the minimum wage to $15 by 2025.
- The small state becomes the ninth to pass a bill eventually raising the wage to $15.
- The move comes after a $15 federal minimum wage was not included in Biden's first stimulus.
- See more stories on Insider's business page.
While a $15 federal minimum wage didn't make it into law earlier this year, the state of Rhode Island is taking matters into its own hands.
On Tuesday, a bill raising the state's minimum wage passed the General Assembly, the Rhode Island legislature that comprises both the House and Senate. Gov. Dan McKee signed it into law in a ceremony Thursday morning.
"Rhode Island is a leader on this, and that's why I congratulate the House and the Senate leadership on this," McKee said in a press conference. According to local outlet WPRI, McKee said that "it's just common sense."
The bill would raise Rhode Island's minimum wage to $15 over four years. The state's minimum wage is currently $11.50 an hour; the legislation would hike that to $12.25 on January 1, 2022, $13 on January 1, 2023, $14 on January 1, 2024, and then finally $15 in 2025.
"Raising the minimum wage lifts people out of poverty, particularly women and people of color who are vastly overrepresented at the bottom of the wage scale," Sen. Ana B. Quezada, one of the bill's co-sponsors, said in a press release on the wage hike. Quezada added: "Raising the minimum wage makes our state a safer, healthier and more prosperous place to live."
In a tweet, the Rhode Island branch of the AFL-CIO said the hike would benefit over 112,000 workers.
-Rhode Island AFL-CIO (@riaflcio) May 19, 2021
As Insider previously reported, gradual increases may help businesses adjust to a higher wage, especially in states where the current minimum is closer to the federal rate of $7.25. However, that can also depreciate the value of the wage by the time it's fully enacted, especially if there are higher rates of inflation.
Rhode Island has a higher average cost of living than other states around the country, meaning that if a $15 minimum wage was enacted there today, it would be worth about $14.81 when adjusted for regional price parities.
With the legislation, Rhode Island will become the ninth state to enact a $15 minimum wage. Florida made headlines last year when it became the eighth state to pass the hike; its wage will increase from $8.56 to $15 by 2026. Currently, 29 states have minimum wages above the federal minimum of $7.25.
"Today, workers with the Fight for $15 and a Union are proud to celebrate alongside more than 100,000 workers in Rhode Island who are now on the path to being paid $15/hour, which is the bare minimum workers anywhere need to survive," Monique Jamison, a worker and leader with the pro-$15 worker advocacy group Fight for $15 and a Union, said in a statement.
"This victory in Rhode Island only adds to the momentum of our movement, which has won over $70 billion in raises for over 27 million Americans in the past nine years," Jamison added.
President Joe Biden has reiterated his support for a $15 minimum wage, an issue that he campaigned on. He recently signed an executive order to implement a $15 minimum wage for federal workers, which will take effect no later than March 30, 2022.
But progress on implementing a higher federal minimum wage has been slow; the last time the wage was raised Biden served as vice president.
Progressives led by Sen. Bernie Sanders pushed for the inclusion of a $15 federal minimum wage in Biden's first stimulus package. However, Senate parlimentarian Elizabeth MacDonough ruled that the wage hike was not permitted under the rules of reconciliation.
Eight Democrats ultimately moved to vote against including the higher wage in the final package. Since then, Democrats have attempted to come together and work out a minimum wage proposal, but they don't seem to have had much luck so far.