Minimum wages will increase in nearly half of states this year

The minimum wage will increase in nearly half of states this year, even though the federal minimum wage remains at $7.25 an hour.

In many states, the minimum wage automatically increases as inflation increases. But voters in several states, including deep red ones like Alaska and Missouri, decided in November to significantly increase their minimum wage this year.

On February 21, Michigan’s minimum wage will increase from $10.33 to $12.48 the state Supreme Court said the legislature diversified residents by adopting and then significantly changing voter-initiated ballot measures in 2018 to increase the minimum wage and paid ill leave mandates.

Michigan’s wage floor is set to increase to $14.97 by 2028, more than twice the federal minimum wage, which hasn’t increased since 2009. That’s it the longest period without a federal raise since Congress first set a minimum wage in 1938.

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A total of 30 states and the District of Columbia set their own minimum wage higher than the federal rate. And 67 cities — including Denver; Arizona Flagpole; and Los Angeles – raised the minimum wage above the state minimum, – reports the Institute of Economic Policyleftist think tank.

Currently, 10 states have a minimum wage of $15 or more: California, Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey, New York, Rhode Island and Washington.

Alaska, Florida, Hawaii, Missouri and Nebraska are on track to reach $15 in the coming years. Such moves in red states should prompt Republicans who control Congress and the White House to raise the minimum wage, argued Richard von Glahn, political director of the labor group Missouri Jobs with Justice.

“We should get Republican legislators to look at what their constituents are telling them and say, ‘You know, maybe they’re on to something and maybe I should follow their lead,’” he said.

Von Glahn led a successful campaign to raise Missouri’s minimum wage from $12.30 in 2024 to $15 an hour next January through a November ballot initiative that also provided many workers with ill leave.

While a tight labor market is forcing many employers to pay above the minimum wage to compete, von Glahn noted that many workers still earn at or near the lowest legal wage. Economic Policy Institute estimates more than half a million workers in Missouri will see raises as the state’s minimum wage increases.

“It kind of proves why this is so necessary and why these guardrails are so important,” he said.

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For Kaamilya Hobbs, Missouri law means she can expect to earn at least an extra 31 cents an hour when she returns to work on Arby’s maternity leave.

She believes this year’s fresh minimum wage of $13.75 will not be enough to live comfortably in Kansas City. But every penny helps her afford basics like diapers and baby formula.

“It won’t be a big difference. But it will still be something small for us,” said Hobbs, 33, who is also an organizer with a group advocating for low-wage workers.

Inflation has significantly eroded the purchasing power of the stagnant federal minimum wage. Supporters say raising the minimum wage helps low-wage workers cover the rising costs of necessities and stimulates the economy by putting more money into the pockets of people who are most likely to spend it. But many employers, especially retailers and restaurants, object that raising the minimum wage forces them to cut workers or raise prices.

In December, President-elect Donald Trump announced he would consider raising the minimum wage nationwide. Trump won 19 of 20 states — all but New Hampshire — still with a $7.25 minimum wage. In an interview with NBC News admitted that $7.25 was a “very low number” but said that raising the minimum wage too much would reduce employment.

“There is a level at which this can be done,” he said, without giving a number.

Earlier this month, Alaska’s minimum wage increased by 18 cents as a result of an automatic inflation-based increase.

However, the current state rate of $11.91 will increase to $13 in July thanks to the passage of the November voting bill. Under this measure, the wage would increase to $14 in July 2026 and $15 in July 2027, followed by an inflation-adjusted increase starting in 2028.

Voting measure was met with fierce opposition from business groups but received 58-42% approval. The fresh law also requires employers to provide up to seven paid ill days per year, which is a grave problem especially in seasonal industries, including tourism.

Before the November election, members of the Alaska Cabaret, Hotel, Restaurant and Retailers Association argued that passage of the ballot measure would result in higher prices and lead to layoffs and reduced employee hours, said Sarah Oates Harlow, the organization’s president and CEO.

The minimum wage increase will especially hurt smaller businesses, she added, and those that employ tipped workers such as waiters and bartenders. Alaska is among seven states that do not allow employers to pay workers in tips less than the minimum wage, which means many of these workers already earn well above the state minimum wage, she added.

“I guarantee prices will go up across the board,” she said. “Grocery will be more expensive. Eating out will be more expensive.”

However, Mark Robokoff, owner of AK Bark pet supply store in Anchorage, believes a higher minimum wage is good for business. He said an increase in the minimum wage would put more money in his customers’ pockets.

“It’s not that there’s no benefit to this cost,” Robokoff said.

To attract the best workers, he said, employee wages start at $17 an hour. But he expects that number to increase as the state’s minimum wage increases.

“That is why it was necessary to introduce the law,” he said. “It will only work if we all do it. Then we will all earn more revenue and pay our workers a little more.”

Editor’s note: This story has been corrected to remove Birmingham, Alabama, from the list of localities that have raised the minimum wage above the state minimum.