When Nebraska voters approved Initiative 433, which raised the minimum wage, last November, Gab Rima knew the kind of difference it would make for many workers. The previous minimum of $9 per hour makes an annual salary of $18,720 before taxes. At that rate, housing, food, a car, phone service, medical insurance and more become an impossible list of choices.
“Before I had this job, my last job I was making $9 an hour and it was not great … I had two jobs and even then it was a paycheck-to-paycheck situation,” said Rima, who now works at Urban Abbey in downtown Omaha. Rima is also a co-founder of Strongly Worded Letters, a civic engagement organization.
By raising its minimum wage, Nebraska joined others in a nationwide trend, moving the lowest earners closer to a decent living. But it will be several years before Nebraskans earn the full $15.
The state’s $9 an hour minimum will increase by $1.50 each year until it reaches $15 in 2026. On Jan. 1, 2023, the minimum wage was raised to $10.50. In 2024, it will increase to $12. In 2025, it will be increased to $13.50, and in 2026, it will be increased to $15 an hour. Moving forward it will be adjusted with the cost of living.
Advocates say the increase is a big step forward, but it shouldn’t be the end of the conversation to ensure all Nebraskans can earn a living wage.
State sen. Terrell McKinney, who co-sponsored Initiative 433, said the community he represents in North Omaha has little access to high-paying jobs and many have to survive on minimum wage. Just the annual cost of owning a new car, which was estimated at more than $10,000 in 2022 by AAA, consumes more than half of a current minimum wage earner’s salary and a third of a person’s salary at $15 per hour. Housing costs are also rising, putting many in a tight spot choosing between essentials.
The initiative passed with 58.7% of the vote, largely because this is not a political issue, McKinney said. Nebraskans, like many across the country, know people can hardly succeed without higher wages, McKinney said, adding this will raise the floor but the conversation should continue.
“Minimum wage has to be increased. It can’t stay what it is,” McKinney said. “If we don’t make those types of changes, how do we ever give to those people and pause the wealth gap?”
Nationally, despite two-thirds of Americans supporting raising the federal minimum wage to $15 an hour, it has stood at $7.25 since July 2009. Since then, it has lost 21% of its purchasing power due to inflation (in 2021 dollars) and 34% since its peak in 1968, according to the Economic Policy Institute.
“In fact, had the federal minimum wage kept pace with workers’ productivity since 1968 the inflation-adjusted minimum wage would be $24 an hour,” said a representative of the Nebraska AFL-CIO, the state chapter of the national union labor council.
According to MIT, a single person with no kids needs to be making almost $17 per hour to make a living wage in Nebraska. Adding kids to the equation raises the floor as high as $54 per hour for a single parent.
Brielle Brown, who works at Ted and Wally’s, the downtown ice cream parlor, said while some say increasing wages can hurt small businesses or strain an economy likely headed for recession, raising wages is a necessity for many people.
“A lot of people nowadays, especially as young adults are living paycheck-to-paycheck,” she said. “I feel like people aren’t surviving on what we’re making and we don’t have a lot of time for ourselves mentally and physically to adapt to everything.”
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