Millions of low-paid people are getting a pay raise in 2025 as 21 states are set to raise their minimum wages on January 1.
According to the Economic Policy Institute, or EPI, a nonprofit think tank, the driving force behind the Jan. 13 increase are state laws that keep the minimum wage in line with inflation. Legislation prompted subsequent wage increases in six states, while ballot measures initiated wage increases in two.
EPI estimates that nearly one in five, or 20%, of the more than 9.2 million affected workers live in households below the poverty line, while almost half, or about 49%, have household incomes less than twice the poverty line. Is below.
Meanwhile, the federal minimum wage of $7.25 an hour has remained unchanged since 2009 and remains law in 20 states. Since then, the base rate has lost 30% of its purchasing power due to inflation, according to Sebastian Martínez Hickey, a state economic analyst at EPI.
“The truth is that the number of workers earning $7.25 an hour is very small, yet because of inaction we are leaving millions of workers out to dry,” Martínez Hickey told CBS MoneyWatch.
Martinez Hickey said about one-third of workers live in states where the minimum wage is $15, and that percentage will increase to nearly half by 2027.
Ohio's minimum wage is rising from $10.45 to $10.70 due to inflation adjustments, but there is not a single county in the state where a worker can earn less than $17.73 an hour and maintain a modest but adequate standard of living, EPI reported Noted.
Oklahoma voters will get a chance to vote on gradually increasing the state's base hourly wage to at least $15 an hour, but not for another year and a half. Oklahoma Governor Kevin Stitt in September signed an executive order scheduling the vote for June 2026.
In Maine, the minimum wage will increase 50 cents to $14.65. This increase is due to a Maine law and 2016 citizen referendum that requires the state to make annual adjustments based on the cost of living index for the Northeast region.
Other states with increases taking effect in 2025 are:
- Alaska's minimum is increasing 18 cents to $11.91 due to inflation adjustments.
- Due to inflation adjustments, Arizona workers will make a minimum of $14.70 in January, which is 35 cents more.
- California's minimum price is increasing 50 cents to $16.50 due to inflation adjustments.
- Colorado's base hourly wage is rising 39 cents to $14.81 due to inflation.
- Connecticut workers will make a minimum of $16.35 an hour, up 66 cents, and adjusted for inflation.
- Delaware's minimum price is increasing by $1.75 to $15.00 due to a law passed by the state.
- Due to the law, Illinois is moving its minimum price to $15.00, an increase of $1.00.
- Michigan's minimum wage is projected to increase 23 cents to $10.56 because of the law.
- Minnesota's inflation-adjusted minimum is up 28 cents to $11.13.
- Due to a ballot measure passed by voters, Missouri is increasing its base hourly rate by $1.45 to $13.75.
- Montana's minimum price will increase 25 cents to $10.55 due to inflation.
- Nebraska employers must pay at least $13.50 by January, an increase of $1.50 due to the ballot measure.
- Because of the law, New Jersey's hourly base increased 36 cents to $15.49.
- The law will cause New York's minimum price to increase by 50 cents to $15.50. In New York City, Long Island and Westchester it is $16.50.
- As a result of the law, Rhode Island is increasing its minimum price by one dollar to $15.00.
- South Dakota's minimum is set to increase 30 cents to $11.50 in 2025 due to inflation.
- Vermont is looking at a minimum hourly rate of $14.01 in the new year, which is 34 cents higher after inflation adjustments.
- Virginia's minimum price is increasing from $12.00 to $12.41 due to inflation.
- Inflation would see Washington's minimum rise 38 cents to $16.66.