[ The minimum wage continues to be a powerful tool for fostering
economic equity and ensuring a dignified standard of living for
workers across the nation. ]
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TWENTY-TWO STATES WILL INCREASE THEIR MINIMUM WAGES ON JANUARY 1  
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Sebastian Martinez Hickey
December 21, 2023
Economic Policy Institute
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_ The minimum wage continues to be a powerful tool for fostering
economic equity and ensuring a dignified standard of living for
workers across the nation. _

Employees at a fast-food restaurant in Boulder, Colorado, prepare
food for customers. , Getty/Daily Camera/Jeremy Papasso

 

On January 1, 22 states will increase their minimum wages
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estimated 9.9 million workers. In total, workers will receive $6.95
billion in additional wages from state minimum wage increases. In
addition, 38 cities and counties will increase their minimum wages on
January 1 above their state’s wage floors, adding to the number of
workers likely to see increased earnings. In the absence of federal
action, states and localities continue to take the lead in advancing
fairer wage floors via legislation, ballot measures, and automatic
inflation adjustments.

The minimum wage continues to be a vital policy for creating a more
equitable economy. According to our analysis:

* Women make up more than half (57.9%) of workers getting an increase
on January 1.
* The minimum wage increases will also disproportionately benefit
Black and Hispanic workers. Black workers make up 9.0% of the
wage-earning workforce in the states with increases, but are 11.1% of
the affected workers. Similarly, Hispanic workers are 19.6% of the
workforce in these states, but 37.9% of the workers receiving wage
increases.
* These increases will also bring important benefits to working
families. More than a quarter (25.8%) of affected workers are parents,
or more than 2.5 million people. In total, 5.6 million children live
in households where an individual will receive a minimum wage
increase.
* The increases will provide critical support to workers and
families in need. Almost one in five (19.7%) workers getting a raise
have incomes below the poverty line, and nearly half (47.4%) have
incomes below twice the poverty line.
* More than half (51%) of workers getting minimum wage increases are
in California, Hawaii, and New York, all high cost-of-living states.

As FIGURE A and TABLE 1 show, the size of wage increases varies widely
across states. Hawaii is the state with the largest increase, growing
by $2.00 to $14.00 an hour, which translates to a $1,380 boost in
annual wages for the average full-time, year-round affected worker
(SEE TABLE 2). Michigan is the state with the smallest increase, going
from $10.10 to $10.33—which translates to an additional $216
annually for the average full-time worker. However, a case before the
Michigan Supreme Court
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could decide that Michigan low-wage workers are entitled to a more
significant increase.

In January, the minimum wages in Maryland, New Jersey, and upstate New
York will reach or exceed $15 an hour for the first time, joining
California, Connecticut, Massachusetts, Washington, and the rest of
New York as states at or above $15 an hour.1
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There are also seven more states that have passed legislation or
ballot measures to reach or surpass $15 an hour in the coming years
(Delaware, Florida, Hawaii, Illinois, Nebraska, Rhode Island, and
Virginia). Washington state will have the highest state minimum wage
at the beginning of the year as it increases from $15.74 to $16.28 due
to an inflation adjustment.

Despite continued progress by many states across the country to
increase their wage floors, there are still 17.6 million workers
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Almost half of workers (47.8%) earning less than $15 an hour are in
one of the 20 states that still uses the federal minimum wage of $7.25
an hour.

It’s important to note that fewer workers are directly affected by
minimum wage increases because the tight post-pandemic labor market
has led to the strongest wage growth
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in decades, even after accounting for rising prices. Low unemployment
has meant that employers have had to pay higher wages to attract and
retain workers. Nevertheless, higher state minimum wages are still
important for securing the gains low-wage workers are attaining during
this remarkable period of wage growth. Minimum wage increases are also
vital to many workers who are more vulnerable to exploitation
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whether it’s because of immigration status, disability, or place of
work.

Although inflation has decreased greatly in the last year, price
increases since 2020 have eroded the purchasing power of the federal
minimum wage and the minimum wages of the 21 states that have made no
adjustments to their state minimums.2
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For instance, the federal minimum wage of $7.25 had the same
purchasing power in February 2020 as $8.61 in November 2023. Many
states have minimum wage policies that proactively address this issue
by indexing their wage floors to price increases. Twelve of the 22
states with increases on January 1 automatically adjust their minimum
wage for inflation every year.

Lawmakers in some states that recently passed minimum wage legislation
are recognizing that inflation has eaten into the value of the targets
they had previously set. Maryland lawmakers passed legislation in 2019
setting the state on the path to $15 an hour, but this year chose to
accelerate
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the increase by a year. Meanwhile, New York state, which implemented
legislation in 2016 to reach $15 an hour, passed a new policy
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Island, and Westchester County increase their minimum wages to $17 an
hour in 2026. The remainder of the state will increase to $16 an hour
during the same period. As in Maryland and New York, federal minimum
wage advocates are adjusting their targets to compensate for increases
in the cost of living in the last few years. The latest federal
minimum wage bill targets $17 an hour
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recognition that $15 an hour will no longer meet the needs of low-wage
workers.

Inflation adjustments are also relevant for local minimum wages, where
the majority of increases are due to automatic adjustments. TABLE 3
shows that 35 cities and counties are making inflation adjustments to
their minimum wages, mostly in California. Tukwila, WA, will have the
highest minimum wage in the country in 2024 at $20.29 an hour.
Localities are carrying the baton on minimum wage policy in other ways
as well. Chicago passed an ordinance to phase out the harmful
subminimum wage for tipped workers by 2028. Chicago joins seven
states3
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the District of Columbia, and Flagstaff, AZ, as jurisdictions that
have or will eliminate this carve-out that allows employers of tipped
workers to pay as little as $2.13 per hour
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Also of note is Boulder County, CO, which this year passed an
ordinance increasing the minimum wage to $25 an hour by 2030.
Advocates targeted this level due to research on the
“self-sufficiency standard
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in the county, an estimate of the income necessary for a family to
cover its basic needs. According to EPI’s Family Budget Calculator
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household in Boulder County needs $108,881 a year to cover a modest
living standard. This translates to roughly $26 an hour if both adults
are working full time, underscoring how difficult it is for low-wage
workers to find a way to live sustainably. A $25 minimum wage might
seem high, but the truth is that Boulder County is unlikely to be the
highest minimum wage in the country in 2030 because of steps other
localities have taken to index their minimum wages to inflation.
Strong minimum wage policy can only benefit localities seeking a
thriving and equitable local economy.

The minimum wage continues to be a powerful tool for fostering
economic equity and ensuring a dignified standard of living for
workers across the nation. The proactive steps many states and
localities took to index their minimum wages to inflation has helped
protect the purchasing power of low-wage workers during the recent
period of inflation. However, policy reforms are still necessary to
overcome federal inaction and the persistence of unjust minimum wage
carve-outs like the tipped minimum wage.

Table 1
23 states increased their minimum wages in late 2023 and January 1,
20242023 and 2024 minimum wages, size of increase, and type of
increase by state

State
2023 minimum wage
2023 tipped minimum wage
2024 minimum wage
2024 tipped minimum wage
Minimum wage increase
Tipped minimum wage increase
Type of increase

January 1 increases
 
 
 
 
 
 
 

Alaska
$10.85 
 – 
$11.73 
 – 
$0.88 
 – 
Inflation adjustment

Arizona
$13.85 
$10.85 
$14.35 
$11.35 
$0.50 
$0.50 
Inflation adjustment

California
$15.50 
 – 
$16.00 
 – 
$0.50 
 – 
Inflation adjustment

Colorado
$13.65 
$10.63 
$14.42 
$11.40 
$0.77 
$0.77 
Inflation adjustment

Connecticut
$15.00 
$6.38 
$15.69 
$6.38 
$0.69 
$0.00 
Inflation adjustment

Delaware
$11.75 
$2.23 
$13.25 
$2.23 
$1.50 
$0.00 
Legislation

Hawaii
$12.00 
$11.00 
$14.00 
$12.75 
$2.00 
$1.75 
Legislation

Illinois
$13.00 
$7.80 
$14.00 
$8.40 
$1.00 
$0.60 
Legislation

Maine
$13.80 
$6.90 
$14.15 
$7.08 
$0.35 
$0.18 
Inflation adjustment

Maryland
$13.25 
$3.63 
$15.00 
$3.63 
$1.75 
$0.00 
Legislation

Michigan
$10.10 
$3.84 
$10.33 
$3.93 
$0.23 
$0.09 
Legislation

Minnesota
$10.59 
 – 
$10.85 
 – 
$0.26 
 – 
Inflation adjustment

Missouri
$12.00 
$6.00 
$12.30 
$6.15 
$0.30 
$0.15 
Ballot measure

Montana
$9.95 
 – 
$10.30 
 – 
$0.35 
 – 
Inflation adjustment

Nebraska
$10.50 
$2.13 
$12.00 
$2.13 
$1.50 
$0.00 
Ballot measure

New Jersey
$14.13 
$5.26 
$15.13 
$5.26 
$1.00 
$0.00 
Legislation

New York (remainder of state)
$14.20 
$9.45 
$15.00 
$10.00 
$0.80 
$0.55 
Legislation

New York (NYC, Long Island, and Westchester)
$15.00 
$10.00 
$16.00 
$10.65 
$1.00 
$0.65 
Legislation

Ohio
$10.10 
$5.05 
$10.45 
$5.25 
$0.35 
$0.20 
Inflation adjustment

Rhode Island
$13.00 
$3.89 
$14.00 
$3.89 
$1.00 
$0.00 
Legislation

South Dakota
$10.80 
$5.40 
$11.20 
$5.60 
$0.40 
$0.20 
Inflation adjustment

Vermont
$13.18 
$6.59 
$13.67 
$6.84 
$0.49 
$0.25 
Inflation adjustment

Washington
$15.74 
 – 
$16.28 
 – 
$0.54 
 – 
Inflation adjustment

September 2023 increases
 
 
 
 
 
 
 

Florida
$11.00 
$7.98 
$12.00 
$8.98 
$1.00 
$1.00 
Ballot measure

 

NOTES: “Legislation” indicates that the new rate was established
by the legislature. “Ballot measure” indicates the new rate was
set by a ballot initiative passed by voters. “Inflation
adjustment” indicates that the new rate was established by a
formula, reflecting the change in prices over the preceding year. New
York has separate minimum wages by region of the state.

SOURCE: EPI compilation of minimum wage data from state agency
websites and state legislation.

* Minimum Wage
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