These states are raising their minimum wage in 2023


The current period of high inflation, which has had a significant impact on the US economy, will also affect a New Year’s tradition: the state’s annual minimum wage increases.

By Jan. 1, the minimum hourly wage in 23 states will increase, with earlier plans to reach $15 an hour or take into account changes in the cost of living. The Economic Policy Institute estimates that the raise is associated with more than $5 billion in wage increases for about 8.4 million workers.

In addition, nearly 30 cities and counties across the U.S. will raise their minimum wages, according to data from the left-leaning think tank EPI.

The higher-than-usual increases in twelve states come after inflation hit a 40-year high this summer, leaving families struggling to keep up with rising costs.

“The fact that there is high inflation just underscores how necessary these minimum wage increases are for workers,” said Sebastian Martinez Hickey, EPI research assistant. “Even before the pandemic, there was no area in the United States where you could live cheaply as a single adult on $15 an hour.”

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The pandemic and subsequent economic recovery have further exposed the widening gap in America’s wealth gap. Over the past two years, this has been fueled by working conditions and low pay the increase in labor movement activity and the actions of many large corporations to raise the minimum wage.

RaiseUpNY Coalition, including Employees International Union 79 and 32BJ SEIU, hold a rally at City Hall Park to fight for a higher minimum wage in Manhattan, New York on November 15, 2022.

The pandemic also caused structural upheavals in the country’s labor market, creating an imbalance between supply and demand for workers that still exists. Employers are short on workers for most of the year, which has pushed up average annual hourly wages in the battle to recruit and retain workers. While some workers in competitive industries such as retail and food service have found their new pay outpacing inflation, most pay has been outpaced by rising prices.

“It’s a different story because wages have been rising at the bottom, much faster than inflation and much faster than middle- or high-wage jobs,” said Michael Reich, an economics professor at the University of California, Berkeley. “And that means many workers, even in $7.25 states, are already being paid above the minimum wage.”

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In other words, he said, the minimum wage “has become less and less compelling.”

“While minimum wages could increase by 7%, labor costs in many states and cities will not increase anywhere near as much as they have in the past because they have already increased,” he said. “It also means that prices will not increase [places like] restaurants.”

The federal minimum wage of $7.25 an hour has not changed since 2009, and 20 states have minimum wages at or below the federal level, making the default base $7.25. The federal minimum wage peaked in 1968 at $1.60, which would be about $13.46 in 2022, based on Bureau of Labor Statistics Inflation Calculator.

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  • Delaware: $10.50-$11.75
  • Illinois: $12 to $13
  • Maryland: $12.50-$13.25
  • Massachusetts: $14.25 to $15
  • Michigan: $9.87-$10.10
  • Missouri: $11.15-$12
  • Nebraska: $9 to $10.50
  • New Jersey: $13-$14.13* (projected increase includes inflation adjustment)
  • New Mexico: $11.50 to $12
  • New York: $13.20-$14.20 (Upper New York); $15 (NYC and vicinity)
  • Rhode Island: $12.25 to $13
  • Virginia: $11 to $12
  • Alaska: $10.34-$10.85
  • Arizona: $12.80-$13.85
  • California: $14.50 (companies with 25 or fewer employees) / $15 (companies with 26+ employees) to $15.50
  • Colorado: $12.56-$13.65
  • Maine: $12.75-$13.80
  • Minnesota: $8.42-$8.63 (small employer); $10.33-$10.59 (Large Employer)
  • Montana: $9.20-$9.95
  • Ohio: $9.30-$10.10
  • South Dakota: $9.95-$10.80
  • Vermont: $12.55-$13.18
  • Washington: $14.49-$15.74
  • Connecticut (effective July 1): $14 to $15
  • Florida (September 2023): $11 to $12
  • Nevada (effective July 1): $9.50-$10.25 (companies offering benefits); $10.50-$11.25 (no benefits offered)
  • Oregon: $13.50 (effective July 1, indexed annual increase will be based on CPI)

Sources: State websites, National Conference of State Legislators, Institute of Economic Policy


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