Minimum wage hikes on the horizon
Gearing up for higher paychecks next year, here's the lineup of states that will see their minimum wages soaring. The reasons behind the rise can be attributed to either planned increases or regulations tying the minimum wage to inflation, often using the consumer price index as a benchmark.
Seven states, plus the District of Columbia, are slated to have a minimum wage of $15 or more by January 1, 2024, rising from only four states and Washington, D.C., with a minimum wage this year. Joining this group for the first time are Maryland, New Jersey, and most of New York State, beside New York City, Westchester, and Long Island, which already boasts a $15 minimum wage. The new minimum wage in this state will further surge to $16.
With Washington at the helm as the state with the highest minimum wage in 2024, standing at $16.28, California follows closely, upping its minimum wage from $15.50 to $16.
Hawaii will see the most significant jump in minimum wage next year, increasing it by a notable $2.
Mind you, January 1 is not the only date for minimum wage hikes. Nevada and Oregon have already scheduled their increases for July 1, while Florida is planning to lift its minimum wage by September 30.
(Note: The full list of minimum wage hikes can be found below.)
City and county standards often eclipse state minimum wages
In many instances, state minimum wages fail to match their local counterparts, with cities and counties often subject to more stringent regulations.
Consider Tukwila, a city situated south of Seattle. Starting January 1, the minimum wage will climb to $18.99 from its current $16.25. Jana Bjorklund, Senior Counsel and Director of Labor Law and Compliance at GovDocs, a compliance software provider for large multinational corporations, predicted that, starting January 1, all cities, counties, and states will possess the highest standard minimum wages for employers.
Tuckwila's neighbor, Seattle, sits just beneath the mark at $19.97 per hour.
According to GovDocs, at least 40 cities and counties are scheduled to raise their minimum wages for the next year, including Flagstaff, Arizona (rising to $17.40), Mountain View, California (rising to $18.85), Denver, Colorado (rising to $18.29), and Portland, Maine (rising to $15).
In specific industries, wage hikes are more pronounced. California, for instance, requires fast-food workers to earn at least $20 an hour as of April 2024. Those in the healthcare sector will begin earning between $18 and $23 an hour, depending on the size and type of their employer, starting June 1. By the end, the job will cost $25 an hour.
In New York City, gig economy workers such as those delivering for Uber, Grubhub, and DoorDash must now pay a minimum wage of $17.96 an hour, rising to $19.96 by 2025.
Affordable wages propel progress
Since the federal minimum wage was set at $7.25 a decade ago, working people have lost considerable purchasing power, sparking efforts to increase wages. Adjusted for inflation alone since 2009, the current figure should be $10.33, highlighting the need for a boost.
Supporters of a higher minimum wage, including Holly Sklar, CEO of the Fair Minimum Wage coalition, advocate for tying the minimum wage to the inflation rate of 1968, when it was $1.60, equivalent to $14.39 today. Sklar posits that $1.60 offers workers the most purchasing power.
She notes that the MIT Living Wage Calculator can estimate the hourly minimum wage necessary for an individual without children to cover basic needs such as food, housing, transportation, and healthcare. In Mississippi, for example, the minimum wage is $7.25, yet in Pike County, a person requires $15.30 an hour to cover their basic needs. Sklar, however, points out that the average hourly wage for childcare workers, short-order cooks, and cashiers – meaning half of this profession earns less – ranges between $9.83 and $10.17 an hour.
Given the lack of meaningful action at the federal level, Sklar expects the states and local governments to shoulder the burden of elevating the minimum wage.
She believes that economic reasons exist for both workers and employers to support a wage boost.
Of course, the relaxation for employees comes as a relief, Sklar said, as people replace worn-out tires or buy clothes for their children.
For businesses, consumer expenditures will increase due to wage hikes, as additional wage earnings will be quickly spent. She also emphasizes that the move contributes to strengthening employee loyalty, as they're less likely to leave jobs, reducing turnover and related costs like hiring and training expenses.
"It's a positive cycle," Sklar concluded.
Minimum wage hikes, state by state
Alaska: $11.73 (increase from $10.85)
Arizona: $14.35 (increase from $13.85) California: $16.00 (originally $15.50)
Colorado: $14.42 (suggested increase); regular rate $13.65
Connecticut: $15.69 (originally $15.00)
Delaware: $13.25 (currently $11.75); increases to $15.00 in 2026
Florida: $13.00 to $13.00 (September 30, 2024)
Hawaii: $14.00 (originally $12.00)
Illinois: $14.00 (originally $13.00)
Maine: $14.15 (originally $13.80) Maryland: $15.00 (more than $13.25 for large employers and $12.80 for small employers)
Michigan: $10.33 (increase from $10.10)
Minnesota: $10.85 $(for large employers, instead of $10.59); $8.85 (for all others)
Missouri: $12.30 (originally $12.00)
Montana: $10.30 (originally $9.95)
Nebraska: $12.00 (originally $10.50)
Nevada: $12.00 or $11.25 (depending on healthcare benefits), effective July 1, 2024
New Jersey: $15.13 (originally $14.13)
New York: $15.00 (except for New York City, Westchester, and Long Island, where it's $16.00)
Ohio: $10.45 (increase from $10.10)
Oregon: Minimum wage of $14.20 will be adjusted to inflation on July 1, 2024
Rhode Island: $14.00 (originally $13.00)
South Dakota: $11.20
Vermont: $13.67 (increase from $13.18)
Washington: $16.28 (originally $15.74)
District of Columbia: Minimum wage of $17.00 will be adjusted to inflation on July 1, 2024
(Unless mentioned otherwise, changes take effect from January 1)
