STATE MINIMUM WAGE
WHAT IS A STATE MINIMUM WAGE AND WHY IS IT IMPORTANT?
State minimum wages are legislative mandates that set a floor for the hourly wage that employers must pay their workers. About 870,000 workers1 in the US earn at or below the federal minimum wage of $7.25, but states can individually establish higher minimum wages.
WHAT PROGRESS HAVE STATES MADE SINCE THE 2020 ROADMAP TO ADOPT AND IMPLEMENT A STATE MINIMUM WAGE OF $10.00 OR GREATER?
11 States Have Increased Their Minimum Wage to $10.00 or Greater
Between 2020 and 2024, the number of states with a minimum wage of at least $10.00 has increased from 19 states to 30 states.
7 States Increased Their Minimum Wage to $15.00 or Greater
States also continued to raise their minimum wages beyond the $10.00 threshold. Between 2020 and 2024, the number of states with a minimum wage of $15.00 or greater has increased from one state (the District of Columbia) to eight states.
- Since October 2020, California, Connecticut, Maryland, Massachusetts, New Jersey, New York, and Washington have increased their minimum wage to $15.00 or greater.
- Six additional states (Delaware, Florida, Hawaii, Illinois, Nebraska, and Rhode Island) are expected to reach the $15.00 threshold by 2026 due to scheduled increases.
- The minimum wage is scheduled to reach $18.00 Hawaii by 2028.
State Minimum Wage Increases Ranged from $0.68 to $4.75 Per Hour, Resulting in More Resources for Families
Since October 2020, the minimum wage has increased in 30 states due to scheduled increases through legislation, ballot referendums, or annual adjustments for inflation.
State minimum wage increases ranged from $0.68 in Michigan to $4.75 in Virginia. Virginia not only was the state with the largest increase since the 2020 Roadmap, it was also the only state with a minimum wage that was set to the federal minimum of $7.25 in October 2020 that increased its wage during this time.
- Six states (Delaware, Florida, Illinois, Maryland, New Jersey, and Virginia) raised their minimum wage by $4.00 per hour or more since the 2020 Roadmap.
These increases can make a substantial difference in a family’s budget, and even small increases add up. For example, a full-time state minimum wage worker in Michigan saw their wage increase only $0.68 since 2020, but that worker now earns $1,414 more per year. In Virginia, a full-time state minimum wage worker earns $9,880 more per year more in 2024 than they did in 2020.
The 21 states that have not increased their minimum wage since October 2020 all have minimum wages below the $10.00 per hour threshold, and in all but one state (West Virginia) the minimum wage is set at, or defaults to, the federal minimum wage of $7.25 per hour. The federal minimum wage has not been adjusted since 2009.
Many States Continue to Adjust Their Minimum Wages for Inflation Each Year
To help wages keep pace with the rising cost of necessities, 21 states adjust, or will adjust, their minimum wage based on inflation each year. Four states (Florida, Michigan, Nebraska, and New York) have statutorily scheduled increases over the next few years and will annually index their minimum wages to inflation thereafter.
However, it’s important to note that, of the 30 states that have increased their state minimum wages since October 2020, five states (Arkansas, Maryland, Massachusetts, New Mexico, and Nevada) have reached the end of scheduled increases, which means families living in these states will struggle to keep up with rising costs in the future, absent additional state action.
Additionally, scheduled increases to the minimum wage will end in an additional four states (Delaware, Hawaii, Illinois, and Rhode Island) by 2028. None of these states will annually adjust their wage for inflation after that date.
8 States Eliminated Subminimum Wages for Workers with Disabilities
States made major legislative progress to eliminate subminimum wages for workers with disabilities.
- Since October 2020, Alaska, Delaware, Hawaii, Oregon, Rhode Island, South Carolina, Tennessee, and Washington have fully eliminated the subminimum wage for workers with disabilities.
- An additional five states (California, Colorado, Illinois, Nevada, and Virginia) are in the process of phasing it out.
No States Newly Eliminated Subminimum Wages for Tipped Workers, but 2 States Are in the Process of Phasing It Out
As of October 2024, seven states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) had eliminated the subminimum wage for tipped workers. Each of these states eliminated the subminimum wage prior to October 2020 and no additional states have eliminated the subminimum wage for tipped workers since that time.
However, two states (the District of Columbia and Michigan) are in the process of phasing out the tipped minimum wage.
- The District of Columbia enacted legislation to gradually increase the tipped minimum wage until it is fully eliminated by July 1, 2027.
- The tipped minimum wage in Michigan will gradually increase until it’s the same as the regular minimum wage in 2030, due to a recent ruling by the Michigan Supreme Court.
Given that approximately 68% of tipped workers are women and 41% are people of color, who largely work in casual restaurants where they earn little in tips,2 eliminating the tipped minimum wage is a critical equity issue.
For more information on state progress to increase state minimum wages, check out the 2024 Prenatal-to-3 State Policy Roadmap.
Moving Forward: States Must Consider How to Maintain the Value of Their Minimum Wage and Ensure All Workers Receive Fair Pay
Rigorous research shows that raising the state minimum wage to at least $10.00 helps families more easily access essential resources, reduces child poverty, improves birth outcomes, and has minimal negative impacts on parental employment. Despite significant progress to increase the state minimum wage since October 2020, the minimum wage has remained static in 21 states, and in all but one of those states, the minimum wage is set at, or defaults to, the federal minimum of $7.25.
Moving forward, more rigorous research is needed to understand the impact higher state minimum wages have on families and the economy. Although initial research has not indicated any negative employment impacts of a $15.00 state minimum wage, more rigorous research will be needed in the future to evaluate the impact of this policy progress.
States may also want to consider who is left out of their state minimum wage law.
- As of October 2024, 43 states have not yet eliminated the subminimum wage for workers with disabilities.
- Only seven states require the tipped minimum wage to be the same as the regular minimum wage.
State minimum wage laws that are inclusive of all workers, keep up with inflation, and are at least $10.00 per hour would help more families access essential resources, such as housing, food, and health care.
NOTES AND SOURCES
- US Bureau of Labor Statistics. (2024). Characteristics of minimum wage workers, 2023. https://www.bls.gov/opub/reports/minimum-wage/2023/home.htm
- One Fair Wage Fact Sheet. (2020). https://www.onefairwage.org/factsheets
