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Minimum-wage workers in more than 20 states just got a raise

© George Dolgikh / Shutterstock   Millions of low-paid workers just got a raise

By Doug Whiteman, MoneyWise

The new year has been ushered in by increases in the minimum wage in 21 states, stretching from Alaska to Florida and from California to Vermont. As a result, nearly 7 million Americans are earning more money in 2020, according to an estimate from the Economic Policy Institute. 

States now have pay floors as high as $13.50 an hour, and a few communities have even gone as high as $15 — and beyond.

Meanwhile, the federal minimum wage stays at $7.25 per hour, where it has sat since 2009. Twenty-one states have remained at that level, too.


New year, new minimum wage

But the other 29 states have decided $7.25 an hour doesn't cut it and have raised the minimum wage on their own.

A number of them adjust their minimums each year to keep up with inflation, while others have been raising the rate by $1 or more in regular steps toward reaching a goal — often $15-an-hour, which became a popular objective after workers at New York City fast-food restaurants went on strike for better pay in 2012.

These are the states that have raised the minimum wage for 2020:

  • Alaska: to $10.19 from $9.89.
  • Arizona: to $12.00 to $11.00.
  • Arkansas: to $10.00 from $9.25.
  • California: to $13.00 from $12.00.(*)
  • Colorado: to $12.00 from $11.10.
  • Florida: to $8.56 from $8.46.
  • Illinois: to $9.25 from $8.25.
  • Maine: to $12.00 from $11.00.
  • Maryland: to $11.00 from $10.10.
  • Massachusetts: to $12.75 from $12.00.
  • Michigan: to $9.65 from $9.45.
  • Minnesota: to $10.00 from $9.86.(*)
  • Missouri: to $9.45 from $8.60.
  • Montana: to $8.65 from $8.50.
  • New Jersey: to $11.00 from $10.00.(*)
  • New Mexico: to $9.00 from $7.50.
  • New York: to $11.80 from $11.10.
  • Ohio: to $8.70 from $8.55.(*)
  • South Dakota: to $9.30 from $9.10.
  • Vermont: to $10.96 from $10.78.
  • Washington: to $13.50 from $12.00.

(*) At larger employers. Smaller employers have a lower rate.


Other places where minimums are rising

Three other states — Connecticut, Nevada and Oregon — will hike their minimum wages later in the year, and Illinois will give its lowest-paid workers a second 2020 raise, to $10 an hour, on July 1.

Meanwhile, 26 cities and counties have hiked the minimum wage locally for 2020, according to the National Employment Law Project, or NELP.

Some of the highest new pay rates at the local level include $16.39 for workers at large employers in Seattle, and $16.05 in a couple of communities in California's pricey Silicon Valley.


Congress attempts to raise the federal minimum wage

© Provided by MoneyWise   lunamarina / Shutterstock

The federal government first established a minimum pay level for U.S. workers in 1938, as part of the response to the Great Depression. The nation's very first minimum wage was 25 cents an hour.

Since then, the federal minimum has been raised 22 times to keep up with inflation. At times, the pay hikes have come annually.

But the last one was in the summer of 2009, more than 10 years ago — the longest stretch on record without an increase. So, states, cities and counties are doing what lawmakers in Washington have so far been unable to do.

In July, the Democratic-controlled U.S. House passed a bill to lift the federal minimum wage to $15 an hour by October 2025.

“All labor has dignity. And the way that we give labor dignity is by paying people the respect and the value that they are worth at minimum," said Democratic U.S. Representative Alexandria Ocasio-Cortez, of New York. "We have to make one fair wage and we have to raise the national minimum wage to $15 an hour, nothing less."

But the legislation is unlikely to be brought up in the Republican-controlled Senate, and the White House says President Donald Trump will veto the legislation if it ever hits his desk.

Republicans and business groups say a national $15 minimum wage would hurt working people and small businesses. "In states and municipalities across the country, a mandated minimum wage hike has consistently led to lost jobs, production, and income, and it must not be replicated on the federal level," said Juanita Duggan, president and CEO of the National Federation of Independent Business.

The nonpartisan Congressional Budget Office estimates that a $15 federal minimum wage could lead employers to lay off as many as 3.7 million workers.

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