In the debate over raising the minimum wage, many people think it will automatically lead to better pay and improved living standards.
However, the reality can be quite different. This is important to note because about 20.6 million people—roughly 30% of all hourly workers who aren’t self-employed and are 18 or older—are classified as “near-minimum-wage” workers, according to research.1
In these states, recent increases in the minimum wage have had mixed effects.
1. California
California’s minimum wage is currently $16 per hour, the third highest in the nation. (ref) The state also recently implemented a $20 minimum wage for the fast-food industry. (ref)
High minimum wages have led to economic issues, such as driving down industries like asparagus farming, which shrank from 37,000 acres to under 3,000. In California, high wages have been a “disaster” for the economy, serving as a warning to other states. (ref)
2. Washington
Washington state has the second highest minimum wage in the country at $16.39 per hour. (ref) While the state has not experienced the same level of economic turmoil as California, there are still concerns about the impact of higher minimum wages.
Businesses have had to raise prices and cut staff hours to offset the increased labor costs. (ref) In addition, the minimum wage hikes have led to a decline in the number of low-wage jobs available.(ref)
3. New York
New York has a minimum wage of $15 per hour in New York City (ref) and $14.20 per hour in the rest of the state.
While the impact has not been as severe as in California, there are still some negative consequences, such as small businesses have struggled to keep up with the higher labor costs. (ref) The minimum wage hikes have also contributed to the high cost of living in New York City. (ref)
4. Massachusetts
Massachusetts has a minimum wage of $15 per hour. (ref) While the state has not experienced the same level of economic turmoil as California, there are still concerns about the impact of higher minimum wages like small businesses have had to raise prices and cut staff hours to offset the increased labor costs. (ref)
5. Arizona
Arizona’s minimum wage rose from $13.85 to $14.35 per hour, effective January 1, 2024, and will stay at this rate until December 31, 2024. Employers must pay the new rate for all hours worked from January 1, 2024. A further increase is expected on January 1, 2025. (ref)
The Arizona Restaurant Association has noted that raising the minimum wage would lead to higher prices for consumers and reduce job opportunities in the restaurant industry. (ref)
6. Connecticut
Starting January 1, 2024, Connecticut’s minimum wage will rise from $15 to $15.69 due to an adjustment based on the Employment Cost Index. Some Republicans in Connecticut worry that this wage increase could affect employee benefits and lead to inflation.
House Republican Leader Vincent Candelora worries that raising the minimum wage to match inflation might push workers’ earnings above the benefit threshold, causing them to lose their benefits. (ref)
7. Oregon
In Oregon, the minimum wage is $14.70 in non-rural counties, $13.70 in rural counties, and $15.95 in the Portland metro area. (ref) Although the wage increased by 50 cents on July 1, this change only matches inflation and doesn’t improve workers’ pay.
Commentary states that instead of negotiating raises with each business individually, the standards board sets wage increases by industry. (ref)
8. Maryland
In Maryland, all employers must pay $15 per hour. (ref) Critics say it could eliminate tipped jobs, cut workers’ earnings, and drive small restaurants out of business.
Servers and bartenders worry that customers will tip less, especially with the increasing number of service fees due to higher labor costs. (ref)
9. Colorado
Colorado’s minimum wage went up to $14.42 and will be adjusted each year based on the Consumer Price Index (CPI). (ref) Studies show that raising the minimum wage can make it hard for employers to keep low-wage workers.
To cope, employers might reduce their staff or invest in automation. Higher minimum wages also push employers to raise pay for mid-level positions to reflect different job responsibilities. (ref)
10. Vermont
Vermont raised the minimum wage to $13.67 per hour starting January 1, 2024, up from the current $13.18. (ref)
A previous report from the Minimum Wage Study Committee left the decision on when to set a $15/hour minimum wage to the Legislature’s committees because of concerns about job losses, where “it takes time for employers to adjust to the higher minimum wages.” (ref)
11. New Jersey
In New Jersey, the minimum wage is $15.13 per hour. (ref) However, not all low-wage workers benefit from this rate because the original law includes some exceptions.
Workers at seasonal and small businesses, as well as many farmworkers, are not covered by this wage. Additionally, service workers who earn tips, like bartenders and waitresses, have different pay rules. (ref)
12. Minnesota
Minnesota’s minimum wage will go up to $11.13 per hour for all types of employers, including large and small businesses, as well as for youth and J-1 visa workers in hotels and lodging. (ref)
There were some concerns about the minimum wage hike: a University of Minnesota professor’s study found that higher wages often lead to lower benefits for workers. To cover the increased costs, employers may raise prices for consumers. (ref)
13. Illinois
Workers aged 18 and older in Illinois are guaranteed a minimum wage of $14.00 per hour. (ref) Employers who pay tips to their workers can pay them 60% of the minimum wage.
The rise in Illinois’ minimum wage has been connected to more small businesses closing and an increase in automation, especially in Chicago’s retail and food service sectors. (ref)
14. Hawaii
Hawaii’s minimum wage went up to $14.00, which will increase by $2 every year. (ref) With the already high cost of living, this wage increase puts more pressure on the local economy.
Many small businesses, especially those that depend on low-wage workers, struggled to afford the higher pay without raising prices or cutting staff. (ref)
15. Maine
In Maine, the minimum wage is $14.15 per hour, with a new minimum salary requirement of $816.35 per week. (ref) Critics argue that this adds another expense, which businesses will likely pass on to consumers. Meanwhile, businesses are already feeling the impact of rising costs. (ref)
16. Alaska
Alaska’s minimum wage increased to $11.73, except for school bus drivers, who must be paid at least twice that amount. (ref) Critics say the current wage isn’t enough to cover basic living costs for workers in the state. (ref)
Alaska’s economy, which relies heavily on seasonal industries, (ref) has faced challenges due to the higher minimum wage. If Ballot Measure 1 passes, the minimum wage will rise to $13.00 at the start of 2025. (ref)
17. Nevada
Nevada’s basic minimum wage is $12.00 per hour. With this rate reaching its limit, some advocates believe lawmakers should raise it to match the current cost of living. (ref)
Critics, however, argue that this change could hurt employers by taking away the option to offer health benefits in exchange for paying employees a lower hourly wage. (ref)
18. Washington D.C.
Although not a state, Washington D.C.’s minimum wage was recently raised to $17.50, and the minimum wage for tipped employees will go from $8.00 to $10.00 per hour. (ref) In response, many small stores and restaurants have either reduced staff or raised prices to cover the higher costs.
The survey found that 88% of restaurant operators raised pay for non-minimum wage employees, with 56% receiving increases of 5-15%. (ref)
19. Rhode Island
In Rhode Island, the minimum wage is $14.00 per hour. (ref) Restaurants nationwide are facing rising labor costs, which will keep increasing as living expenses grow.
Most have already raised prices in the past year to cover higher ingredient costs, but may need to raise prices again to pay their staff fairly. (ref)
20. New Mexico
New Mexico’s minimum wage is $12.00 per hour. (ref) This wage increase has made things harder for the state’s agricultural sector, which competes with nearby states that have lower wages.
Farms have cut back on hiring and are using more machines to save money. (ref)
21. Delaware
Delaware’s minimum wage is $13.25. A new law will raise the wage by more than $1 each year until it hits $15 an hour by 2025. (ref) The wage increase has raised costs for Delaware’s manufacturing and agriculture sectors.
In Delaware, some workers, including those in agriculture, are not covered by minimum wage protections. (ref)
While raising the minimum wage is intended to help low-paid workers, the effects can be more complicated than expected.
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Martha A. Lavallie
Martha is a journalist with close to a decade of experience in uncovering and reporting on the most compelling stories of our time. Passionate about staying ahead of the curve, she specializes in shedding light on trending topics and captivating global narratives. Her insightful articles have garnered acclaim, making her a trusted voice in today's dynamic media landscape.
