New Year’s pay boost: These states are raising their minimum wage

Dec 31, 2022, 10:46 AM
Paying the credit card bill,  minimum payment. (Adobe Stock Photo)...
Paying the credit card bill, minimum payment. (Adobe Stock Photo)
(Adobe Stock Photo)

(CNN) — The current period of high inflation that has significantly impacted the US economy will also influence a New Year’s tradition: The annual state minimum wage increases.

By January 1, hourly minimum wages in 23 states will rise as part of previously scheduled efforts to reach $15 an hour or to account for cost-of-living changes. The increases account for more than $5 billion in pay boosts for an estimated 8.4 million workers, the Economic Policy Institute estimates.

Additionally, nearly 30 cities and counties across the US will increase their minimum wage, according to the EPI, a left-leaning think tank.

The larger-than-typical increases for a dozen states come after inflation hit a 40-year high this summer, leaving families struggling to keep up with the rising costs.

“The fact that there’s high inflation really just underscores how necessary these minimum wage increases are for workers,” said Sebastian Martinez Hickey, a research assistant at the EPI. “Even before the pandemic, there was no county in the United States where you could affordably live as a single adult at $15 an hour.”

The pandemic and the subsequent period of economic recovery has further revealed the growing chasm in America’s wealth gap. During the past two years, working conditions and low pay contributed to a swelling of labor movement activity and actions by many large corporations to raise their wage floor.

The pandemic also led to a structural upheaval in the nation’s labor market, creating an imbalance of worker supply and demand that still persists. Employers have found themselves short of workers for most of the year, which has pushed up average annual hourly wages in the battle to recruit and retain staff. While some workers in competitive industries such as retail and dining have found their new salary outpaces inflation, most pay has been outpaced by rising prices.

“The story is different because wages have been increasing at the low-end, much faster than inflation and much faster than in middle- or high-wage jobs,” said Michael Reich, economics professor at the University of California at Berkeley. “And that means that many workers, even in the $7.25 states, are already getting paid above the minimum wage.”

In other words, he said, the minimum wage “has become less and less binding.”

“Even though minimum wages might go up by 7%, in many states and cities, labor costs aren’t going to go up anywhere as much as they have in the past, because they already have gone up,” he said. “That also means that prices aren’t going to go up at [places like] restaurants.”

The federal minimum wage of $7.25 per hour hasn’t budged since 2009, and 20 states have a minimum wage either equal to or below the federal level, making $7.25 their default baseline. The value of the federal minimum wage peaked in 1968 when it was $1.60, which would be worth about $13.46 in 2022, based on the Bureau of Labor Statistics’ inflation calculator.

States with scheduled minimum wage increases on December 31, 2022, or January 1, 2023

  • Delaware: $10.50 to $11.75
  • Illinois: $12 to $13
  • Maryland: $12.50 to $13.25
  • Massachusetts: $14.25 to $15
  • Michigan: $9.87 to $10.10
  • Missouri: $11.15 to $12
  • Nebraska: $9 to $10.50
  • New Jersey: $13 to $14.13* (scheduled increase also includes inflation adjustment)
  • New Mexico: $11.50 to $12
  • New York: $13.20 to $14.20 (Upstate New York); $15 (in and around NYC)
  • Rhode Island: $12.25 to $13
  • Virginia: $11 to $12

Cost of living increases of state minimum hourly wages:

  • Alaska: $10.34 to $10.85
  • Arizona: $12.80 to $13.85
  • California: $14.50 (firms with 25 or fewer employees) /$15 (firms with 26+ employees) to $15.50
  • Colorado: $12.56 to $13.65
  • Maine: $12.75 to $13.80
  • Minnesota: $8.42 to $8.63 (small employer); $10.33 to $10.59 (large employer)
  • Montana: $9.20 to $9.95
  • Ohio: $9.30 to $10.10
  • South Dakota: $9.95 to $10.80
  • Vermont: $12.55 to $13.18
  • Washington: $14.49 to $15.74

Later in 2023:

  • Connecticut (effective July 1): $14 to $15
  • Florida (September 2023): $11 to $12
  • Nevada (effective July 1): $9.50 to $10.25 (firms that offer benefits); $10.50 to $11.25 (no benefits offered)
  • Oregon: $13.50 (effective July 1, indexed annual increase to be based on the CPI)

The-CNN-Wire™ & © 2022 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.

KSL 5 TV Live

Top Stories

National News

FILE: A Frontier airlines plane lands at the Miami International Airport on June 16, 2021 in Miami,...
Zoe Sottile

Frontier Airlines announces new unlimited summer flight pass

Frontier Airlines has announced its newest incentive to get travelers back in the air post-pandemic: An unlimited summer flight pass that costs $399.
1 day ago
Born on May 11, 1992, Bobi is 30 years and 268 days old. (Guinness World Records)...
Amarachi Orie

Meet, Bobi. The new official world’s oldest living dog

Sorry, Spike. There's a new world's oldest living dog, and he's the oldest ever recorded
1 day ago
Flames erupt after a train derailment in East Palestine, Ohio, on February 3. (Courtesy Kevin Csern...
Rebekah Riess and Hannah Sarisohn

Train derailment in northeastern Ohio sparks massive fire

A train derailment and resulting large fire have prompted an evacuation order in an Ohio village near the Pennsylvania state line.
1 day ago
In this photo provided by Brian Branch, a large balloon drifts above the Kingstown, N.C. area, with...
Zachary Cohen

US military has shot down the Chinese spy balloon off US East Coast, US official says

The US military has shot down the suspected Chinese surveillance balloon over the Atlantic Ocean off the Eastern Seaboard of the United States, a US official said Saturday.
1 day ago
A graphic image of a plane-like spacecraft...
Ashley Strickland

Cosmic seaplanes and self-growing bricks could help us explore other worlds

What are the emerging technologies that could provide new ways of studying the universe?
1 day ago
A man works at an avocado orchard in Santa Ana Zirosto, Michoacan state, Mexico, Thursday, Jan. 26,...
Associated Press

Route to Super Bowl is long, dangerous for Mexican avocados

It is a long and sometimes dangerous journey for avocados destined for guacamole on tables and tailgates in the United States during the Super Bowl.
1 day ago

Sponsored Articles

vintage photo of lighting showroom featuring chandeliers, lamps, wall lights and mirrors...
Lighting Design

History of Lighting Design | Over 25 Years of Providing Utah With the Latest Trends and Styles

Read about the history of Lighting Design, a family-owned and operated business that paved the way for the lighting industry in Utah.
Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Festive kitchen in Christmas decorations. Christmas dining room....
Lighting Design

6 Holiday Decor Trends to Try in 2022

We've rounded out the top 6 holiday decor trends for 2022 so you can be ahead of the game before you start shopping. 
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
New Year’s pay boost: These states are raising their minimum wage