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OVER 8.3 MILLION WORKERS WILL BENEFIT FROM MINIMUM WAGE INCREASES ON
JANUARY 1  
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Sebastian Martinez Hickey
December 16, 2025
Economic Policy Institute
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_ Nineteen states will increase their minimum wages on January 1,
boosting earnings for more than 8.3 million workers by a total of $5
billion. In addition, 47 cities and counties will raise their minimum
wages. _

Nineteen states will increase their minimum wages on January 1,
Economic Policy Institute

 

THREE KEY TAKEAWAYS:

* More than 8.3 million workers will get a raise starting January 1
as 19 states raise their minimum wages.
* For the first time, there will be more workers in states with a
$15 or greater minimum wage than in states with the federal minimum of
$7.25.
* Minimum wage increases are critical for improving affordability.
State and federal policymakers should ensure wage floors meet the
needs of all workers.

FIGURE A

 

State minimum wage increases this January will boost wages for a broad
range of working people and help shape a more equitable economy. Our
estimates account for all affected workers: Both those directly
receiving an increased minimum wage and those indirectly affected as
employers adjust their wage ladders to the new wage floor. According
to our analysis:

* Women make up the majority (58.1%) of affected workers.
* Black and Hispanic workers will disproportionately benefit. 10.7%
of affected workers are Black, despite being 8.7% of the workforce in
these states. Meanwhile, 38.3% of affected workers are Hispanic,
despite being 19.8% of the overall workforce in these states.
* The vast majority (87.4%) of affected workers are adults, not
teenagers.
* A quarter (25.3%) of affected workers are parents. 4.8 million
children live in households with at least one worker receiving a pay
increase.
* Nearly half (49.4%) are full-time workers and 41.4% have at least
some college education.
* More than one in five (21.0%) affected workers have household
incomes below the poverty line and 48.8% are within 200% of the
poverty line.

BOOSTING THE MINIMUM WAGE IS GOOD AFFORDABILITY POLICY

Minimum wage increases are an essential tool for putting money in
workers’ pockets. As concerns about rising prices and affordability
dominate the news cycle, it is critical to recognize that
“affordability” is a function of both prices _and_ wages. And
while prices in most cases are unlikely to decline significantly
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policymakers can make decisions that boost wages for workers. In
Hawaii, the minimum wage increase from $14.00 to $16.00 an hour will
raise annual wages by $1,346 for a full-time worker (see FIGURE A).
Missouri’s increase from $13.75 to $15.00 an hour will boost annual
wages by $920 for a full-time worker.

Price increases are squeezing workers today because lawmakers for
decades have made policy decisions that suppress workers’ pay
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including allowing the federal minimum wage to stagnate. The federal
minimum wage has not increased from $7.25 an hour in more than 15
years, during which time its value has eroded by more than 30%. In
2025, the federal minimum wage is below the poverty line,
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but it is still the law of the land in 20 states that have more than
60.2 million total workers (see FIGURE B).

Policymakers can protect the value of the minimum wage over time as
prices increase. Many of the states with small wage increases in
January, like Minnesota, are making annual inflation adjustments to
their wage floor. Not only do these adjustments automatically protect
workers’ purchasing power over time, they also provide
predictability to employers, allowing them to anticipate and plan
modest adjustments to worker pay each year. Despite the prudence of
inflation adjustments, conservative policymakers in some states have
still opposed it. In Missouri, Republican lawmakers stripped
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a successful minimum wage ballot measure of its indexing provision,
leaving low-wage workers vulnerable to a weakening wage standard over
time.

IN 2026, MORE WORKERS WILL LIVE IN A STATE WITH AT LEAST A $15 MINIMUM
WAGE THAN A $7.25 MINIMUM WAGE

In the past decade, dozens of states
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passed significant minimum wage increases to counteract federal
inaction. In 2026, minimum wages in Arizona, Colorado, Hawaii, Maine,
Missouri, and Nebraska will reach or exceed $15 an hour for the first
time, meaning that a total of 17 states and Washington D.C. will reach
that threshold. For the first time, there will be more workers living
in a state with a $15 or higher wage floor than workers living in
states still stuck at $7.25 (see FIGURE B). These increases have taken
place in urban and rural states as well as politically “blue” and
“red” ones. This milestone reflects the progress of the minimum
wage movement over the past decade but also underscores the gap
between how workers in some states are paid relative to their peers
doing the exact same jobs elsewhere in the country. There are still 14
million workers
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earning less than $15 an hour who have been left behind because
Republican lawmakers at both the federal and state level have denied
them a raise.

FIGURE B

 

More states could pass a $15 minimum wage soon, despite interference
from conservative policymakers. In 2020, Virginia passed legislation
to reach a $15 minimum wage by 2026, but the law required
reauthorization by the state legislature by July 2024. Republican
Governor Glenn Youngkin repeatedly vetoed
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those planned increases. Governor-elect Abigail Spanberger has
promised
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to support a minimum wage increase. In Oklahoma, Republican Governor
Kevin Stitt delayed
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a vote on a 2024 $15 minimum wage ballot measure until June 2026.

These delays not only push back potential wage gains for workers, they
also chip away at the value of those increases because of inflation.
Because the Oklahoma policy is a ballot measure, the language cannot
be adjusted to account for the lost time since 2024. However,
policymakers in Virginia could enact a new minimum wage target that
accounts for the higher-than-expected inflation since the pandemic.
This would likely mean a minimum wage of $16.64 in 2026 or $17.02 in
2027.1
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RISING PRICES MEAN HIGHER MINIMUM WAGE TARGETS ARE NECESSARY
THROUGHOUT THE COUNTRY

Rising costs of living throughout the country will require
policymakers to target minimum wages at higher levels than have been
typical in recent years. When striking fast food workers in New York
City sparked the Fight for $15 movement in 2012
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the buying power of a $15 minimum wage was substantially higher than
it is today. In 2025, a $15 minimum wage does not achieve economic
security for working people in most of the country. This is
particularly true in the highest cost-of-living cities. TABLE 1
compares the 2026 minimum wage and living wage for select metro areas
across the country. The living wage standards are from EPI’s Family
Budget Calculator [[link removed]] (FBC), a
measure of a modest yet adequate standard of living for families in
each U.S. metro area and county. The living wage standards
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for a single adult, assuming 81% of their total income is from wages.

The minimum wage does not exceed the FBC’s living wage in any
county, but minimum wage increases make a significant difference for
workers. Oklahoma City has the lowest living costs listed in the
table, but the state minimum wage of $7.25 is only 42% of the living
wage ($17.31). By comparison, Seattle will have a $21.30 minimum wage
in 2026, almost 80% of the living wage in the metro despite its higher
cost of living. Even outside of especially high-cost localities,
strong minimum wage policies have set wage floors much closer to the
living wage needs for workers. For instance, Missouri’s $15 minimum
wage is 81% of the living wage in Kansas City, Mo. ($18.51).

TABLE 1

 

Workers are continuing to demand higher wages so that they can afford
to live in the communities where they work. Hospitality workers in Los
Angeles are poised to gain a $30 minimum wage, although the city
council could water down
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the increases. The New York City
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mayoral campaign and new efforts in D.C
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are also elevating ambitious minimum wage policies. As shown in TABLE
4, dozens of localities in Arizona, California, Colorado, and
Washington are already implementing minimum wage targets above $17,
$18, and $19 an hour. Seven localities in Washington will have minimum
wages above $20 an hour.

Research has consistently shown
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that increasing the minimum wage remains a powerful tool for making
the economy more equitable without causing job losses. The
affordability crisis underlines how essential it is for federal,
state, and local policymakers to take action so that workers are not
left further behind, but lawmakers have taken relatively little new
action on minimum wage policy in recent years. Of the 19 state
increases this January, only two (Rhode Island and Michigan) are the
result of policies passed in 2025. In addition, while Colorado
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D.C., and Michigan all boosted their minimum wage this year, they also
reinforced carve-outs
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for tipped workers. Even as millions of workers get raises this
January, state and federal policymakers must do more to ensure their
wage floors meet the needs of all workers.

TABLE 2

 

TABLE 3

 

 

TABLE 4

 

 

NOTE

1.
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to CBO CPI-U projections in January 2020, $15.00 in 2026 was
equivalent to $13.00 in 2020. If we adjust $13.00 an hour to account
for actual CPI-U increases and CBO projections for future growth
(September 2025 projections), the equivalent value is $16.64 in 2026
or $17.02 in 2027. 

SEBASTIAN MARTINEZ HICKEY (he/him) is a State Economic Analyst on the
State Policy & Research team at EPI. Martinez Hickey’s research
studies state minimum wages, employment levels and pay in the public
sector and K-12 education, and state unemployment insurance. He is
passionate about centering race and gender in his research and
providing historical context for modern day inequalities. His research
on state minimum wage increases has been used in numerous debates
regarding state and local minimum wage ballot measures. He has made
numerous media appearances discussing the minimum wage and public
education workers. In addition, he provides technical support to the
state-level policy research and advocacy organizations that make up
the Economic Analysis and Research Network (EARN). He originally
joined EPI in 2021 as a research assistant.

Martinez Hickey has been quoted in Marketplace, CNN, FAIR radio, KFF
Health News, and News & Views with Joel Heitkamp, and his work has
been cited in the Washington Post, CBS News (Money Watch), NPR,
Politico, MarketWatch, the Hill, Business Insider, Mother Jones, and
the Associated Press.

Prior to joining EPI, Martinez Hickey worked as a Bill Emerson
National Hunger Fellow where he trained community advocates for
affordable housing at the Welcome Home Coalition in Portland, OR and
researched access to mental health services for young people with
low-incomes at CLASP.

The ECONOMIC POLICY INSTITUTE’s vision is an economy that is just
and strong, sustainable, and equitable — where every job is good,
every worker can join a union, and every family and community can
thrive.About EPI. The Economic Policy Institute (EPI) is a nonprofit,
nonpartisan think tank working for the last 30 years to counter rising
inequality, low wages and weak benefits for working people, slower
economic growth, unacceptable employment conditions, and a widening
racial wage gap. We intentionally center low- and middle-income
working families in economic policy discussions at the federal, state,
and local levels as we fight for a world where every worker has access
to a good job with fair pay, affordable health care, retirement
security, and a union.

We also know that research on its own is not enough—that’s why we
intentionally pair our research with effective outreach and advocacy
efforts as we fight to make concrete change in everyday people’s
lives.

Donate to Economic Policy Institute
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* Minimum Wage
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