NEW YORK -- Tobacco, energy drinks and beer sales may be the winners following recent minimum-wage increases, according to a recent analyst report.
Fourteen states have passed minimum-wage increases in 2014, most of which are already in effect as of Jan. 1, with an additional hike taking effect in California July 1. On average across the 14 states, the minimum wage increased 4.3%, with the largest increase in New Jersey at 14% ($7.25 to $8.25) and the lowest at 1.3% shared by Arizona, Ohio and Montana who each hiked minimum wages 10 cents.
The 2014 minimum-wage increases are taking place at states accounting for 42% of the U.S. population, including 7 of the nation's 15 most populous states (California minimum wage +13%, New York +10% and Florida +4%), reported Nik Modi, tobacco and beverage analyst for RBC Capital Markets LLC, New York.
“When taking the weighted average of each state's minimum-wage increase and population, we find these select minimum-wage hikes translate to a 3% wage increase for the average, minimum wage-earning American consumer nationwide,” Modi wrote.
This hike in income “is particularly positive” for tobacco, energy drinks and beer, he said.
“The biggest benefactor of these moves is … Lorillard who generates a meaningful portion of sales and profit from New York, as well as California, where overall tobacco consumption is highest,” he wrote. “California is also a leading market for Monster and Constellation, who stand to benefit from increased energy drink and beer consumption, respectively.”
| State | New Minimum Wage |
|---|---|
| Arizona | $7.90 |
| California | $9.00 |
| Colorado | $8.00 |
| Connecticut | $8.70 |
| Florida | $7.93 |
| Missouri | $7.50 |
| Montana | $7.90 |
| New Jersey | $8.25 |
| New York | $8.00 |
| Ohio | $7.95 |
| Oregon | $9.10 |
| Rhode Island | $8.00 |
| Vermont | $8.73 |
| Washington | $9.32 |
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