Activists call for a $15 minimum wage near the Capitol in Washington in 2021. J. Scott Applewhite/AP Hide Caption
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J. Scott Applewhite/Associated Press
Minimum wage workers in 21 states will receive higher paychecks in the new year. These are among the thousands of laws that will change as the new year begins.
These wage hikes will affect an estimated 9.2 million workers, totaling $5.7 billion in wages, according to the Economic Policy Institute, a think tank that publishes economic research and examines wage growth expectations for 2025. It is said that there will be an increase.
An additional 48 cities and counties will raise their minimum wages above the state minimum wage starting Tuesday.
California is raising its minimum wage from $16 to $16.50, one of 14 states that adjusts its minimum wage increases for inflation. The average annual salary for full-time minimum wage workers in these states would increase by about $420, according to EPI.
Five states have increased their statewide minimum wage through previously adopted legislation, and two states, Nebraska and Montana, have made changes after voters passed ballot measures.
With these continued increases, 19 states and Washington, D.C., will have a minimum wage of at least $15 by 2027, according to EPI research.
Meanwhile, the $7.25 federal minimum wage hasn’t increased in 15 years, and the purchasing power of a dollar isn’t what it once was. Workers are in a difficult position as food and housing prices increase over time.
Research shows that a full-time minimum wage worker earning $7.25 an hour earns just $20 more than the poverty guideline for a single-person household. If a worker has more children or needs to care for other family members, he or she falls below the poverty level. Drexel University’s Center for Communities Without Hunger found in 2021 that a “true living wage” that supports an individual’s basic food and housing needs is $20 to $26 an hour, or more in some states. .
Dollar bills are displayed in New York. The Economic Policy Institute said the Jan. 1 minimum wage increase shows that “the minimum wage remains a powerful tool for combating racial and gender wage gaps.” Mark Lenihan/AP Hide caption
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Mark Lenihan/Associated Press
Who will be most affected by the increase?
Those who most directly benefit from these wage increases are women and Black and Hispanic workers.
“The Jan. 1 increase will ensure that the minimum wage is a powerful tool to combat racial and gender pay gaps, support working families, and reduce poverty,” EPI said in its report. It shows that we are continuing.”
According to EPI’s analysis, women make up nearly 60% of workers who have experienced a pay increase. Just over 11% of higher paid workers are black and nearly 40% are Hispanic.
Jimena Sanchez (right), a college student studying child development, earns minimum wage as a part-time cashier at a family store in Los Angeles on Oct. 11. Damian Dovarganes/AP Hide Caption
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Damien Dovarganes/AP
However, according to EPI, minimum wage levels may still be too low to keep up with rising commodity and house prices. This is especially true if local minimum wages were tied to inflation years ago and have not been revisited since. EPI points to Ohio, which last passed a significant minimum wage increase in 2007, and this year the minimum wage will increase from $10.45 to $10.70, adjusted for inflation.
Rising food and housing costs were top concerns for voters in the 2024 election. While many polls and experts point to voter dissatisfaction with the economy as a major reason for President-elect Donald Trump’s re-election, experts including Federal Reserve Chairman Jerome Powell believe that 2024 This is despite indications that the U.S. economy will be in good shape as we head into the end.
