In 21 states, minimum-wage workers will receive higher pay in the upcoming year. As the new year dawns, they are part of the thousands of laws that are altering.
The Economic Policy Institute, a think tank that examines the anticipated salary increases in 2025 and produces economic research, estimates that those wage increases will affect 9.2 million workers and increase pay by a total of $5.7 billion.
Beginning Tuesday, 48 more counties and towns will boost their minimum pay above the state wage floors.
One of the 14 states that is raising the minimum wage to account for inflation is California, which is doing so by raising it from $16 to $16.50. According to EPI, the average full-time minimum-wage worker in these states will earn about $420 more per year.
Through previously passed legislation, five states are raising the statewide minimum wage, while two states, Nebraska and Montana, are making changes as a result of ballot measures approved by voters.
According to EPI, 19 states and Washington, D.C., will have a minimum wage of at least $15 by 2027 as a result of these ongoing hikes.
As the cost of groceries and housing has climbed over time, workers are in a difficult situation because the federal minimum wage of $7.25 has not raised in 15 years and one dollar no longer has the same purchasing power as it once did.
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According to research, a full-time minimum wage worker at $7.25 per hour only earns $20 more than the poverty threshold for a household headed by a single person. If a worker has children or must take care of other family members, they are below the poverty line.
In 2021, the Center for Hunger-Free Communities at Drexel University determined that, depending on the state, “a true living wage” that covers a person’s essential housing and food expenses would range from $20 to $26 or more per hour.
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Who is affected by increases the most?
Black and Hispanic workers, as well as women, are among the groups that will directly benefit from these wage hikes.
“The January 1 increases show that the minimum wage continues to be a powerful tool for combating racial and gender wage disparities, supporting working families, and reducing poverty,” EPI stated.
According to EPI’s data, nearly 60% of workers who receive raises are women. Nearly 40% of workers who are receiving greater wages are Hispanic, and little more than 11% are Black.
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However, according to EPI, the minimum wage level might still be insufficient to cover growing costs of living. This is particularly true if the minimum wage in a community was linked to inflation years ago and hasn’t been reviewed since. Ohio was mentioned by EPI as a state that last raised its minimum wage significantly in 2007.
This year, it will rise from $10.45 to $10.70 due to inflation.