More than half of U.S. states to increase minimum wage in 2023

Several states across the country are days away from implementing increases in minimum wage, according to payroll experts at Wolters Kluwer Legal & Regulatory U.S. So far, a total of 26 states have announced raises in minimum wage in 2023, and at least one state is likely to see an increase in July. To support employers, labor attorneys, and employees across the country, Wolters Kluwer has prepared a comprehensive analysis of legislative updates to outline the states that will raise their minimum wage in the coming years.

“The biggest factor in the minimum wage adjustments for 2023 is the high rate of inflation seen in the last year,” said Deirdre Kennedy, senior payroll analyst at Wolters Kluwer Legal & Regulatory U.S. “Different states are setting their own rules – including a cap on the percentage the minimum wage can increase – given the intense impact that inflation can have.”

Key takeaways from the analysis of upcoming minimum wage changes include:

  • The highest state rate is in Washington, at $15.74 per hour while the District of Columbia’s minimum wage is $16.10.
  • Thirteen states, the District of Columbia, and numerous cities and counties tie their minimum wage rate to the Consumer Price Index (CPI), resulting in a significant increase in pay for hourly employees in those areas. Some states have implemented a cap on the percentage that the minimum wage can increase to protect against big jumps in the minimum wage in times of high inflation. More states will begin inflation-based increases in future years after concluding schedules of fixed-rate increases.
  • Several states will continue with their scheduled increases to the minimum wage, with both Delaware and Maryland seeing an increase of $1.25, reaching $11.75 and $13.25 (for large employers) respectively. Massachusetts’ minimum wage is $15.00 as of January 1 and Connecticut’s will reach $15.00 on June 1. More states are still on track to reach a minimum wage of $15 per hour within the next few years, including New Jersey by 2024; Delaware, Illinois, Maryland (large employers), and Rhode Island by 2025; and Florida and Maryland (small employers) by 2026.
  • Michigan may see two increases to its minimum wage in the first two months of 2023. A scheduled increase from the current $9.87 to $10.10 will go into effect January 1. The laws that established the scheduled increase were struck down by the Michigan Court of Claims, however, returning the minimum wage to that established by two prior voter-initiated laws which would have brought the minimum wage to $12.00 in 2022 and tied future increases to inflation. The court has delayed the effective date of its ruling to February 19, 2023, at which time the minimum wage will increase to $13.03 per hour should an appeal of the court’s ruling fail.
  • Two states and the District of Columbia saw ballot measures affecting minimum wage pass in the November midterm elections. Nebraska voters supported Initiative 433, which increases the state’s minimum wage to $15 per hour, up from $9 per hour, by 2026. The minimum wage will adjust annually based on inflation after 2026. Voters in Nevada approved a measure raising the minimum wage to $12 per hour in 2024. The measure also removes the existing provision that sets different rates for the minimum wage based on whether the employer offers certain health benefits to employees. In D.C., voters approved Initiative 82, a ballot measure that eliminates the tip credit by 2027. At that time, tipped employees’ wages will align with wages for non-tipped employees.

Wolters Kluwer Legal & Regulatory U.S. analysis on upcoming state minimum wage increases can be found on its research platform VitalLaw and below:

Alaska

$10.85 per hour, up from $10.34 per hour.

Arizona

$13.85 per hour, up from $12.80 per hour.

California

$15.50 for all employers regardless of size, up from $15.00 for large employers and $14.00 for small employers in 2022. While the hourly minimum wage for small employers (those with fewer than 26 employees) was originally scheduled to rise to only $15 in 2023, California labor law requires the minimum wage for these employers to equal that of large employers (those with 26 or more employees) when the rate of inflation exceeds 7% in the year that the hourly minimum wage for large employers is $15.00. The average consumer price index from July 1, 2021, to June 30, 2022, increased by 7.9%.

Colorado

$13.65, up from $12.56.

Connecticut

$14 per hour, scheduled to increase to $15 on June 1, 2023.

Delaware

$11.75 per hour, up from $10.50, pursuant to legislation signed in July 2021 that will increase the minimum wage to $15.00 by 2025 (S.B. 15, L. 2021).

Florida

$11.00 per hour, up from $10.00. Wage rates are adjusted annually based on inflation. A constitutional amendment approved by voters in the November 3, 2020, General Election will increase the minimum wage to $12.00 on September 30, 2023, and to $15.00 by 2026.

Illinois

$13.00 per hour, up from $12.00. The minimum wage is scheduled to reach $15 in 2025.

Maine

$13.80 per hour, up from $12.75.

Maryland

In 2023, the minimum wage is $13.25 for large employers (up from $12.50) and $12.80 for small employers (up from $12.20), increasing at different increments to reach $15 in 2025 for large employers and in 2026 for small employers.

Massachusetts

$15.00 per hour, an increase of 75 cents.

Michigan

$9.87 per hour increasing to $10.10 January 1, 2023, and (possibly) to $13.03 on February 19, 2023. (The Michigan Court of Claims struck down a legislative amendment to two voter-initiated laws that brought the state’s minimum wage to $12.00 by 2022. The voter-initiated law was thus reinstated, with an effective date of February 19, 2023. The law tied minimum wage increases to inflation beginning in 2023, which would set the minimum wage at $13.03 in 2023, pending the outcome of an appeal of the court’s decision.)

Minnesota

$10.59 per hour (up from $10.33) for employees of large employers with an annual gross volume of sales not less than $500,000. Small employers must pay employees a minimum wage of at least $8.63 per hour (up from $8.42).

Missouri

$12.00 per hour, up from $11.15 per hour.

Montana

$9.95 per hour for businesses with annual gross sales of more than $110,000. Wage rates are adjusted annually based on inflation.

Nevada

$10.50 per hour for employees who do not receive health benefits, to increase to $11.25 on July 1, 2023. $9.50 per hour for employees who do receive health benefits, to increase to $10.25 on July 1, 2023.

New Jersey

$14.13 per hour for most employees, up from $13.00 per hour. The minimum wage had been scheduled to reach $14.00 per hour in 2023 but was adjusted due to a significant increase in the Consumer Price Index.

The minimum wage for direct-care workers in long-term health care facilities is $3 higher than the state minimum wage (A 4482, L. 2020).

New Mexico

$12.00 per hour, up from $11.50.

New York

Tiered/Rates vary by region: $15 per hour in New York City and in Nassau, Suffolk, and Westchester counties; $14.20 per hour in the remainder of the state. Effective October 1, 2022, the minimum wage for home care aides as defined in New York’s Public Health Law §3614-c increased by $2 per hour above the basic minimum hourly rate.

The minimum wage for workers in fast food establishments is $15 per hour in all of New York state. The minimum wage at all airports (LaGuardia, JFK, and Newark Liberty International) reached $19.00 in 2023.

Ohio

$10.10 per hour, up 80 cents from $9.30 per hour. Wage rates are adjusted annually based on inflation. The minimum wage rate applies to employees of businesses with annual gross receipts of $372,000 per year (changed from $342,000 in 2022). For employees at smaller companies and for 14- and 15-year-olds, the state minimum wage is $7.25 per hour, which is tied to the federal rate.

Oregon

The state minimum wage is tiered, with the highest rate in the Metro Portland area at $14.75 per hour, the lowest in rural (non-Urban) areas at $12.50 per hour, and a “standard” minimum wage of $13.50 per hour in the rest of the state. Starting July 1, 2023, the minimum wage in Portland will be set at $1.25 over the standard minimum wage, and the non-Urban rate will be set at $1 less than the standard minimum wage. Also starting July 1, 2023, the minimum wage adjustment will be tied to inflation.

Rhode Island

$13.00 per hour up from $12.25. The state minimum wage will reach $15.00 per hour in 2025.

South Dakota

$10.80 per hour, up 85 cents from $9.95 per hour. Wage rates are adjusted annually based on inflation.

Vermont

$13.18 per hour. This is a 63-cent scheduled increase over the $12.55 per hour 2022 rate.

Virginia

$12.00 per hour, up from $11.00. The increase is part of a series of scheduled increases to reach $15.00 per hour by 2026.

Washington

$15.74 per hour. Workers under 16 years old can be paid 85 percent of the adult minimum wage, or $13.38 per hour, in 2023.

 

Image courtesy of Flickr/The All-Nite Images
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4 thoughts on “More than half of U.S. states to increase minimum wage in 2023

  1. Raising wages does little when bidenflation eats it up in one bite. If political hacks want to make a difference they will close the national wallet to the free spending d’rats and rino’s. Mcdonalds in Texas just put in their first fully robotized fast food center which is their answer to making their food more costly due to labor costs.You don’t have to work for minimum wage just get a better job that pays more, with benefits.

  2. Re: “Wage rates are adjusted annually based on inflation.”

    Econ 101: The proverbial dog chasing its tail. As wage rates increase, so too does the corresponding cost of goods and services. Inflation is the result of the increase in cost, and resulting selling price, of those goods and services.

    This has nothing to do with supply and demand. If supply and demand remain the same over a given period, prices will increase when labor costs increase.

    There is a double whammy that adversely affects the very people receiving this arbitrary wage increase.

    The reason workers earn a minimum wage, whatever it happens to be, is because they are the least productive workers in a business. Typically, raises occur when workers demonstrate an increase in their value to their respective businesses. If worker A makes 10 widgets an hour, while worker B makes 12 widgets, worker B should earn proportionately more than worker A. If that’s not the case, worker B won’t bother being any more productive than worker A. That’s human nature.

    So now there’s an assigned minimum wage. Let’s say worker A receives a $1 per hour raise to the assigned minimum. Is it unreasonable to think worker B won’t expect (i.e., demand) a commensurate wage increase? If anyone doubts this, just wait for the next teacher union collective bargaining issue in your school district.

    Okay. So, worker A receives a $1 raise. Then worker B gets an extra $1.05, because he’s more productive than worker A. And then worker C gets an extra $1.10 because she’s that much more productive than worker B. And then worker D chimes in. And so it goes – all the way up the wage ladder. Hence, while worker A receives a $1 per hour raise because our legislators think they’re doing him a favor, in reality, the inflation that occurs as these wage increases ripple up the wage ladder, causes the cost of goods sold to increase exponentially, and the resulting inflation outpaces the increased minimum wage.

    Anyone who understands basic math can see that if a legislator really wanted to improve the standing of the minimum wage worker, they’d require an equal percentage cut in everyone’s pay. Instead of a 10% increase, require a 10% decrease. The higher wage earners would have a greater dollar for dollar decrease than the minimum wage worker. And that, everyone, is called wage and price controls. Good luck with that.

    The point is that ‘minimum wage’ strategies smack of pure socialism. From each according to his ability, to each according to his need. But what Marx and Engles never explained is: who determines one’s ability and need? And how do they do that?

    Adam Smith and others came up with the most elegant method to achieve this relationship. It’s called free enterprise. Free markets are proven to handle these economic complexities far better than centralized assignments. Milton Friedman said it best.

    “The key insight of Adam Smith’s Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”

    And…

    “The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”

    The minimum wage, whatever it is, is a contradiction of terms.

    • Hi Jay,

      I think that people either believe in the free market or they don’t.
      NH has a pretty low minimum wage by law here- we let the market determine what the wages are.
      It seems to me that leaving businesses alone to find their own way without government interference is the best policy- and the cheapest policy for the taxpayers.

      This is not all that hard really. If you don’t pay people enough, you won’t have a business because people will all go work for somewhere that pays better.
      It’s really that simple.

      This is the same old story: people look to the government for answers-like good socialists do- and the government is quite happy to open a new department, spend millions on studies, raise taxes and then muck it all up for us.
      Why on earth at this point in time does anyone want the government involved in *anything* at all anymore?
      The government loses credibility by the day as far as I’m concerned.
      Each Twitter Drop from Elon should be showing people this.

      • ‘Whatever one ‘believes’, arbitrarily raising a minimum wage hurts the very people its supposed to help.

        So why do those who support government intervention in this regard push the minimum wage? Because they skim off the top of the increased tax revenues for their own benefit. They are scammers and con artists… nothing more.

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