December 22, 2022 at 4:36 pm by Sebastian Martinez Hickey and David Cooper
Economic Policy Institute

More than 8 million workers will get a raise on New Year’s Day: 23 states and D.C. will see minimum wage hikes ranging from $0.23 to $1.50 an hour

On January 1, 23 states and Washington, D.C. will increase their minimum wages, raising pay for an estimated 8.4 million workers across the country.1 In total, workers’ wages will increase by more than $5 billion, with average annual raises for affected full-time workers ranging from $150 in Michigan to $937 in Delaware. In addition, 27 cities and counties will increase their minimum wages on January 1, adding to the number of workers likely to see increased earnings.

The state with the stingiest increase is Michigan with a 23-cent raise bringing the total to $10.10 an hour, while the biggest hike of $1.50 an hour is in Nebraska, raising the rate to $10.50 an hour.2 Washington, D.C. will not increase its regular minimum wage, but will increase its tipped minimum wage by 65 cents to $6.00 an hour as a result of a ballot measure to eliminate the tipped minimum wage by 2027. When the New Year’s celebrations die down, Washington will be the state with the highest minimum wage of $15.74 an hour.

These increases（ncluding those prompted by automatic inflation-linked adjustments, state law triggers, and legislative action『ill benefit workers nationwide, from rural states such as South Dakota to coastal urban states like New Jersey. Most of the affected workers (54.9%) are age 25 or older, and nearly half (44.8%) work full time. Although workers with only a high school degree or less education are the group most likely to be affected, 40.9% of affected workers have at least some college experience. Importantly, more than 2 million parents will get a raise, including more than a million single parents. In total, we estimate that more than 5.7 million children live in households that will see an increase in earnings at the start of the new year.

The impact of these minimum wage hikes varies considerably by state and the size of the increase. As Figure A and Table 1 show, some of these increases are the result of automatic inflation-linked adjustments (or “indexing”) that many states have built into their minimum wage laws, helping ensure paychecks keep up with rising prices. Other increases are the result of minimum wage levels set explicitly in state law or through ballot amendments to state constitutions.