January 1 Brings Raise Day for Millions Across the US

A new study suggests that the implementation of higher minimum wages across 22 states on January 1 will benefit over 10 million workers economically.

About 9.9 million workers would get an additional $7 billion in yearly salaries as a result of the higher basic pay, according to a research report published on December 21 by the left-leaning Economic Policy Institute. The raises will raise the minimum wage in three states: California, New York, and Washington-to at least $16 per hour.

The association added that 38 more towns and counties will raise their minimum salaries in addition to the state pay increases.

The implementation of greater minimum wages coincides with workers experiencing increased prices as a result of inflation, which is beginning to decline after reaching a 40-year high in 2022. Twelve of the states that have increased wages base their basic pay on inflation, meaning that workers are protected from declining buying power as prices rise through an annual adjustment.

Despite this, the federal minimum wage has remained at $7.25 per hour since 2009, despite a more than 40% increase in inflation over that time.

Later in 2024, the minimum wage in three more states: Florida, Nevada, and Oregon, will rise. While Florida's minimum wage will rise on September 30, Nevada and Oregon will implement new basic pay rates on July 1.

Who Is Getting It?

According to the EPI's projection, women and people of color will benefit disproportionately from the pay increases.

Women will make up around 6 out of 10 of the workers who will gain from the increased required salary. According to the organization, although Hispanic workers make up 20% of the workforce in states that are raising the minimum wage, they account for roughly 40% of individuals who would be affected by the increases in pay.

Similarly, Black employees will be impacted in proportion of 11%, although making up just 9% of the workforce in these 22 states.

Despite numerous employers raising their entry-level wages to stay competitive in a challenging labor market, the Economic Policy Institute (EPI) emphasizes the ongoing significance of higher baseline wages. The EPI highlights that these wage adjustments are crucial for securing lasting gains for workers.

Holly Sklar, CEO of Business for a Fair Minimum Wage, emphasized the importance of state-level increases, especially with the federal minimum wage stagnating at $7.25 per hour, falling further behind the cost of living.

Workers in six states-California, Connecticut, Maryland, New Jersey, New York, and Washington-will be guaranteed baseline pay that is more than double that of the federal minimum wage as a result of the state wage rises that take effect on January 1.

From Alabama to Wisconsin, the 20 states where the minimum wage will stay at $7.25 per hour are mostly in the Midwest and South.

Next year, a few counties and localities will increase their minimum salaries as well, raising their lowest pay levels above the statewide minimum.