01-09-2025
An estimated 9.2 million low-wage workers will receive pay raises in 2025 because of minimum wage increases. According to the Economic Policy Institute (EPI), these increases will equal $5.7 billion. The twenty-one states with increases are Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Rhode Island, South Dakota, Vermont, Virginia, and Washington. Forty-eight cities and counties will raise wages beyond their state minimum wages.
California is adjusting its minimum wage to compensate for inflation from $16 to $16.50. For average minimum wage workers in that state, EPI states they will earn about $420 more a year. By 2027, 19 states and Washington D.C. will offer workers at least $15 an hour (EPI). Female, Black, and Hispanic workers will benefit most from these increases. Sixty percent of workers earning minimum wage are women. Nearly 40% are Hispanic. However, these minimum wage increases will not be enough to keep up with the rising costs of food and housing. Ohio will raise its minimum wage from $10.45 to $10.70 this year due to inflation. The state last made a big change to its minimum wage in 2007.
The federal minimum wage has remained locked at $7.25 for the last fifteen years. Twenty states adhere to that wage. NPR reports that workers receiving this federal wage make just $20 more than the poverty guidelines for a single household. If these workers have kids or other family members to support, they fall below the poverty line. A Drexel University center determined in 2021 that a “true living wage” to meet our basic food and housing needs requires between $20 and $26 per hour, depending on the state.