Workers in These 22 States Got a Pay Increase on Jan 1

As the clock strikes midnight on New Year's Eve, the beginning of 2024 will bring more than just a fresh start for many workers across the United States. Minimum-wage workers in 22 states are set to see a boost in their paychecks, offering relief to nearly 9.9 million individuals, according to the Economic Policy Institute (EPI).

The wage increases are estimated to contribute an additional $6.95 billion to the pockets of hardworking Americans. Here's a breakdown of the key changes.

States with minimum wage increases

The following 22 states will increase the minimum wage.

Alaska: $10.85 to $11.73 (Inflation adjustment)

Arizona: $13.85 to $14.35 (Inflation adjustment)

California: $15.50 to $16.00 (Inflation adjustment)

Colorado: $13.65 to $14.42 (Inflation adjustment)

Connecticut: $15.00 to $15.69 (Inflation adjustment)

Delaware: $11.75 to $13.25 (Legislation)

Hawaii: $12.00 to $14.00 (Legislation)

Illinois: $13.00 to $14.00 (Legislation)

Maine: $13.80 to $14.15 (Inflation adjustment)

Maryland: $13.25 to $15.00 (Legislation)

Michigan: $10.10 to $10.33 (Legislation)

Minnesota: $10.59 to $10.85 (Inflation adjustment)

Missouri: $12.00 to $12.30 (Ballot measure)

Montana: $9.95 to $10.30 (Inflation adjustment)

Nebraska: $10.50 to $12.00 (Ballot measure)

New Jersey: $14.13 to $15.13 (Legislation)

New York: (remainder of state): $14.20 to $15.00 (Legislation)

New York (NYC, Long Island, and Westchester): $15.00 to $16.00 (Legislation)

Ohio: $10.10 to $10.45 (Inflation adjustment)

Rhode Island: $13.00 to $14.00 (Legislation)

South Dakota: $10.80 to $11.20 (Inflation adjustment)

Vermont: $13.18 to $13.67 (Inflation adjustment)

Washington: $15.74 to $16.28 (Inflation adjustment)

Celebration of progress, but disparities persist

These increases mark a positive shift, especially for workers in states where the minimum wage has remained stagnant at the federal level of $7.25 since 2009. The move toward inflation adjustments, legislation, and ballot measures demonstrates a commitment to aligning wages with the rising cost of living and helping lower your financial stress.

Despite the progress, the Department of Labor reports that 20 states will continue to uphold the federal minimum wage, impacting approximately 17.6 million workers. States that have not announced an increase in the federal minimum wage for 2024 include Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin, and Wyoming.

The refusal to adjust wages has significant consequences, especially when considering the stark rise in the cost of living.

Inflation's toll

The Bureau of Labor Statistics reveals that a dollar in 2023 can purchase only about 70% of what it could in 2009. The past year has witnessed rampant inflation, affecting essential commodities like housing and groceries. At the same time, the broader economy shows resilience; those earning minimum wage struggle to meet basic needs and still need ways to save on basic essentials.

Looking beyond the numbers

It's not just about statistics; it's about people. According to EPI data, nearly 58% of workers benefiting from the wage increase are women. Additionally, 9% are Black, and almost 38% are Hispanic. Over 25% of these individuals are parents, and for approximately 20% of them, the increase is a step toward escaping poverty.

The disparities in minimum wages across states highlight the urgency for comprehensive federal action. The Raise the Wage Act of 2023, introduced by Senate Democrats, proposes a gradual increase in the federal minimum wage to $17 an hour by 2028. It could pave the way for fairer compensation and improved living standards if passed.

Lower-paying jobs remain the most difficult to fill since the pandemic. At the same time, the cost of living has increased dramatically due to inflation and increased prices, especially in major categories like food and gasoline. The minimum wage seems to be at a standstill, with about half the country committing to increases and the other half stagnating without much movement from the federal minimum.

The state of minimum wage

Without federal action, states and localities are taking the lead in advancing fairer wage floors. Legislation, ballot measures, and automatic inflation adjustments drive this change wave. The minimum wage remains a vital policy for creating a more equitable economy, and the impacts are far-reaching.

Demographic impact

According to the EPI analysis, women constitute more than half (57.9%) of workers getting an increase on January 1. Black and Hispanic workers are set to benefit disproportionately. While Black workers make up 9.0% of the wage-earning workforce in states with increases, they represent 11.1% of the affected workers. Similarly, Hispanic workers, comprising 19.6% of the workforce in these states, make up 37.9% of the workers receiving wage increases.

More than a quarter (25.8%) of affected workers are parents, impacting over 2.5 million people. In total, 5.6 million children live in households where an individual will receive a minimum wage increase. Nearly 20% of workers getting a raise have incomes below the poverty line, with 47.4% having incomes below twice the poverty line.

Geographical distribution

Over half (51%) of workers getting minimum wage increases are in California, Hawaii, and New York — all high cost-of-living states.

Variations in wage increases

Hawaii takes the lead with the largest increase of $2, growing from $12 to $14 — an impactful boost of $1,380 in annual wages for the average full-time, year-round affected worker. Conversely, Michigan's more modest increase from $10.10 to $10.33 translates to an additional $216 annually for the average full-time worker. However, a case before the Michigan Supreme Court could potentially lead to a more significant increase.

Looking ahead

Lawmakers in some states recognize the urgency to address the impact of inflation on minimum wage targets. Maryland accelerated its path to $15 an hour, and New York implemented a new policy raising minimum wages to $17 an hour in certain regions. Federal minimum wage advocates are also adjusting their targets, aiming for $17 an hour by 2028.

Local initiatives and challenges

Inflation adjustments are crucial, especially for local minimum wages, where most increases are due to automatic adjustments. Localities are taking innovative steps, with Boulder County, Colorado, passing an ordinance aiming for a $25 minimum wage by 2030. While this may seem high, it reflects the reality of the cost of living in the county. Such initiatives underscore the need for robust minimum wage policies at both state and local levels.

Bottom line

The minimum wage remains a powerful tool for fostering economic equity and ensuring workers' dignified living standards nationwide. While the post-pandemic labor market has driven strong wage growth for low-wage workers, minimum wage increases are vital for securing these gains. As we step into the new year, the push for fair wages persists, emphasizing the ongoing need for comprehensive federal action to address the disparities in minimum wages across states and localities.