Minimum wage increases are taking effect in 19 states as the new year begins, with some states surpassing the $15-per-hour threshold. Notable increases include Connecticut, now at $16.94, and Washington at $17.13, reflecting adjustments based on inflation and recent legislative changes. Other states such as Ohio and Montana, which have relatively lower minimums, also implemented inflation adjustments, boosting their minimum wages to $11 and $10.85 respectively.
The federal minimum wage has remained unchanged at $7.25 since 2009, leaving states the authority to set their minimum wages. According to recent data from payroll software firm ADP, 20 states currently maintain a minimum wage at or below the federal level, while 34 states and territories, including Washington D.C., Puerto Rico, and Guam, enforce higher rates in certain areas.
January is typically associated with numerous minimum wage adjustments, as states execute cost-of-living increases mandated by law. For instance, Nebraska will see a significant hike to $15 by 2026 as part of a multiyear ballot measure approved by voters in 2022.
Additional wage increases are expected later in the year in at least four states. The minimum wage adjustments often link to inflation indexes like the Consumer Price Index (CPI) to ensure wages remain aligned with rising living costs.
Among the states raising their minimum wages this year are Arizona, California, Colorado, and New Jersey, with varying increments. It’s important to note specific exceptions, such as in Connecticut where their minimum wage adjusts according to the Employment Cost Index rather than the CPI.
Why this story matters:
- Reflects ongoing trends in wage policies across the United States.
Key takeaway:
- Many states are raising their minimum wages in response to inflation, despite the federal rate remaining stagnant.
Opposing viewpoint:
- Critics argue that increasing minimum wages can adversely affect small businesses and lead to job losses.
