Minimum Wages to Go Up in 22 States on Jan. 1

A Now Hiring sign outside a resale clothing shop in Los Angeles on June 2, 2023. (Mario Tama/Getty Images)

Multiple states will see minimum wages rise beginning next year, all of which already have hourly minimum wages higher than the federally mandated rate.

In total, 22 states will see minimum wages jump effective Jan. 1, 2024. Six will have minimum wages of at least $15 per hour: California, Connecticut, Maryland, New Jersey, most parts of New York, and Washington. The highest minimum wage among the states will be in Washington, where employees will receive a minimum of $16.28 per hour, while the lowest is in Minnesota, at $8.85.

The following are all of the increases going into effect at the start of next year:

• Alaska: From $10.85 per hour to $11.73.
• Arizona $13.85 to $14.35.
• California: $15.50 to $16.
• Colorado: $13.65 to a proposed $14.42.
• Connecticut: $15 to $15.69.
• Delaware: $11.75 to $13.25.
• Hawaii: $12 to $14.
• Illinois: $13 to $14.
• Maine: $13.80 to $14.15.
• Maryland: All wages will rise to $15, up from $13.25 for large employers and $12.80 for small businesses.
• Michigan: $10.10 to $10.33.
• Minnesota: For large employers, wages will jump from $10.59 to $10.85. For others, wages will rise from $8.63 to $8.85.
• Missouri: $12 to $12.30
• Montana: $9.95 to $10.30.
• Nebraska: $10.50 to $12.
• New Jersey: $14.13 to $15.13.
• New York: $14.20 to $15 everywhere except in New York City, Westchester, and Long Island, where the wage is set to rise from $15 to $16.
• Ohio: $10.10 to $10.45.
• Rhode Island: $13 to $14.
• South Dakota: $10.80 to $11.20.
• Vermont: $13.18 to $13.67.
• Washington: $15.74 to $16.28.

In addition to the above, Nevada’s minimum wage is scheduled to rise to $12 and Oregon’s to $14.20 on July 1. Florida will raise its minimum wage to $13 in September. In the District of Columbia, minimum wage will be set at $17 per hour beginning July 1.

In 20 states, the minimum wage will remain $7.25 per hour as federal law mandates. There is no minimum wage in five states: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee.

According to U.S. Department of Labor Statistics data, 78.7 million workers aged 16 and above were paid at hourly rates last year. This represented 55.6 percent of all wage and salary workers.

Among hourly workers, 141,000 people made exactly $7.25 per hour. About 882,000 had wages below the federal minimum wage. These 1 million workers made up 1.3 percent of all hourly paid workers.

Economic Gain Versus Loss

It’s hotly debated whether raising the minimum wage would boost the U.S. economy or end up hurting it.

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Holly Sklar, CEO of Business for a Fair Minimum Wage, said in a July 25 press release: “Stuck at just $7.25 an hour since 2009, the minimum wage is a poverty wage instead of an anti-poverty wage. That’s bad for business as well as for workers.”

She said that raising the minimum wage will “strengthen businesses and our economy.”

“Minimum wage increases don’t stay in workers’ pockets. They boost the consumer spending that drives business and the economy,“ she said. ”Fair wages also help businesses hire and retain employees and deliver the reliable product quality and customer service that leads to repeat customers instead of lost customers.”

Multiple reports have warned about job losses from raising the minimum wage.

A 2015 report from the Federal Reserve Bank of San Francisco concluded that “the overall body of recent evidence suggests that the most credible conclusion is a higher minimum wage results in some job loss for the least-skilled workers—with possibly larger adverse effects than earlier research suggested.”

In 2019, the Congressional Budget Office warned that raising the minimum wage to $15 by 2025 could cause 1.3 million Americans to become jobless.

A June 16 preprint study this year found that raising minimum wages by $2.50 per hour resulted in a 14 percent increase in homelessness.

“To the extent minimum wages cause disemployment of low-skill workers, the lost job can exacerbate existing economic insecurity and lessen ability to pay for housing. Even if employers do not cut total employment, however, minimum wages might induce churn in the labor market,” the report stated.

“Relatively high-skill workers might enter the labor force at the higher minimum and displace those with lower skills. Current residents previously out of the labor force might enter to capture the higher minimum, or workers from other geographies might migrate for the higher wage.”

In California, a new law that will come into effect in 2025 and requires a $25 per hour minimum wage in the health care industry is facing criticism because of worries that it would negatively affect the sector.

The new law “will leave hospitals no choice but to ... cut positions and services in order to comply with the bill,” the California Hospital Association warned in an analysis.

“With fewer positions and potentially fewer providers, healthcare professionals will have fewer opportunities, be at heightened risk of job loss, and have less flexibility in the positions that are available.”