The minimum wage will increase in nearly half of the states this year, although the federal wage floor remains at $7.25 an hour.
In many states, the minimum wage is automatically adjusted upwards as inflation rises. But voters in several states, including deep red states like Alaska and Missouri, decided in November to significantly increase their minimum wages this year.
In Michigan, the minimum wage will rise from $10.33 to $12.48 on February 21st concluded the state Supreme Court Lawmakers undermined residents when they passed voter-initiated ballot measures in 2018, but then significantly amended them to raise the minimum wage and mandate paid ill days.
Michigan’s wage floor is set to rise to $14.97 by 2028 – more than double the federal minimum wage, which has not increased since 2009. That is the longest period without a federal increase since Congress first established a minimum wage in 1938.
A total of 30 states and the District of Columbia have set their own minimum wage higher than the federal rate. And 67 locations – including Denver; Flagstaff, Arizona; and Los Angeles – have raised their minimum wage above the state minimum wage, according to the Economic Policy Institutea left-leaning 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 hit $15 in the coming years. Such a move in red states should prompt Republicans who control Congress and the White House to move the national wage floor, argued Richard von Glahn, policy director for the labor rights group Missouri Jobs with Justice.
“We should have Republican legislators looking and seeing what their own constituents are telling them and saying, ‘You know, maybe they’re on to something here, 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 ballot initiative in November that also guaranteed ill leave for many workers.
While a tight labor market is forcing many employers to pay above the minimum wage to be competitive, von Glahn noted that many workers are still earning at or near the lowest legal wage. The Institute for Economic Policy estimates that more than half a million workers work in Missouri There will be increases as the state minimum wage increases.
“That kind of proves why this is so necessary, why these guardrails are so important,” he said.
For Kaamilya Hobbs, Missouri law means she can expect to earn at least 31 cents more per hour when she returns to work at Arby’s after maternity leave.
This year’s recent minimum wage of $13.75 wasn’t enough to live comfortably in Kansas City, she said. But every contribution helps her to be able to afford essentials such as diapers and baby food.
“It won’t be a big difference. But it will still be special for us,” said Hobbs, 33, who also organizes a group that advocates for low-wage workers.
Inflation has significantly weakened the purchasing power of the stagnant federal minimum wage. Supporters say raising the wage floor helps low-wage workers cover the rising costs of imperative goods and stimulates the economy by putting more money in the pockets of people who are likely to spend it. However, many employers, particularly retailers and restaurants, counter that raising the minimum wage will force them to cut workers or raise prices.
In December, President-elect Donald Trump said he would consider increasing the minimum wage nationwide. Trump won 19 of the 20 states — all but New Hampshire — that still have a $7.25 minimum wage. In an NBC News interview: He acknowledged that the $7.25 rate was “a very low number” but said raising the minimum wage too much would reduce employment.
“There is a level at which you can do it,” he said, without giving a number.
Earlier this month, Alaska’s minimum wage rose by 18 cents thanks to an automatic inflation-related increase.
But the state’s current tax rate of $11.91 will rise to $13 this July thanks to the passage of a ballot measure in November. Under the measure, the wage will rise to $14 in July 2026 and $15 in July 2027, followed by inflation-adjusted increases starting in 2028.
The ballot measure faced robust opposition from business groups but received approval of 58-42%. The recent law also requires employers to provide up to seven paid ill days per year – a large problem, particularly in seasonal industries, including the tourism industry.
Before the November election, members of the Alaska Cabaret, Hotel, Restaurant and Retailers Association said passage of the ballot measure would lead to higher prices and lead to layoffs and shorter hours for workers, said Sarah Oates Harlow, the organization’s president and chief executive officer.
The minimum wage increase will particularly hurt smaller businesses, she said, and those with tipped workers, such as waiters and bartenders. Alaska is among seven states that don’t allow employers to pay tipped workers less than the minimum wage, meaning many of those workers already earn well above the state’s wage floor, she said.
“I guarantee you prices will go up across the board,” she said. “Food is becoming more expensive. Eating out becomes more expensive.”
However, Mark Robokoff, owner of pet supply store AK Bark in Anchorage, thinks a higher wage floor is good for business. He said increasing the minimum wage will put more money in his customers’ pockets.
“It’s not that there’s no benefit to these costs,” Robokoff said.
To attract the best employees, he said, employee wages start at $17 an hour. However, he expects that number to rise even further as the state minimum wage increases.
“That’s why it had to be a law,” he said. “It only works if we all do it. Then we will all achieve more sales and pay our employees a little more.”
