Millions of Americans received pay bumps on Wednesday as hourly minimum wages increased in 21 states. The increases, ranging from 18 cents to $1.75 per hour, will affect over 9.2 million workers and boost their earnings by a combined $5.7 billion, according to the Economic Policy Institute.
Some cities and municipalities also raised their minimum wages further above state floors, with California, Colorado, and Washington being among the states that made significant increases. The moves are part of ongoing efforts to keep pace with rising costs of living and meet milestones such as a $15-an-hour minimum wage.
Despite these efforts, some argue that the current minimum wage level may still be too low. Sebastian Martinez Hickey, a state economic analyst for the EPI, noted that the rate hasn’t budged since 2009 and that indexed wages haven’t been revisited in years.
The pandemic has exacerbated income inequality, leading to a surge in labor movement activity and pushes for higher federal minimum wages. Currently, only 20 US states have a minimum wage at or below the federal level, with some states opting not to adopt any type of wage floor.
Some studies suggest that raising the minimum wage can have positive effects on workers’ well-being without negative impacts on businesses. A recent study from the University of Michigan found that lower-wage workers tend to benefit more from minimum wage hikes, while independent businesses often offset the increases with higher wages and increased productivity. Experts argue that the impact of minimum wage hikes is often overstated.
Source: https://edition.cnn.com/2025/01/02/economy/us-states-minimum-wage-2025/index.html