If you’re earning minimum wage, you might be seeing a boost in your paycheck this year! As of January 1, 2025, 21 states have increased the minimum wage, impacting over 9.2 million workers nationwide. This increase amounts to an additional $5.7 billion in pay for these workers throughout the year.
Here’s a breakdown of the states that have increased their minimum wage rates in 2025.
States Raising the Minimum Wage This Year
While the federal minimum wage remains at $7.25 per hour, unchanged since 2009, many states have implemented annual wage hikes based on inflation or legislation passed in previous years.
Below is a list of states that increased their minimum wage:
· Alaska: Increased to 11.91 per hour.*
· Arizona: Increased to $14.35 per hour.*
· California: Increased to $16.50 per hour statewide, with some cities setting even higher local rates.
· Colorado: Raised to $14.81 per hour*, with Denver increasing it further to $18.29 per hour.
· Connecticut: Raised to $16.35 per hour.*
· Delaware: Raised to $15.00 per hour.
· Illinois: Now at $15.00 per hour.
· Maine: Raised to $14.65 per hour, with Portland setting a higher rate of $15.50. However, the minimum for service employees is $7.75.
· Michigan: Raised to $10.65 per hour.*
· Minnesota: Now $11.13 per hour*, with Minneapolis and St. Paul with higher minimum wage ordinances.
· Missouri: Increased to $13.75 per hour.*
· Montana: Increased to $10.55 per hour.*
· Nebraska: Increased to $13. 05 per hour.*
· New Jersey: Increased to $15.49 per hour* for most employers.
· New York: Raised to $16.50 per hour in New York City, Westchester and Long Island County, while the rest of the state is at $15.50 per hour.
· Ohio: $10.70 per hour for nontipped employees and $5.35 per hour for tipped employees.*
· Rhode Island: Raised to $15.00 per hour.
· South Dakota: Raised to $11.50 per hour.*
· Vermont: Raised to $14.01 per hour.*
· Virginia: Raised to $12.41 per hour.*
· Oregon: Will increase wages on July 1, 2025, with different rates depending on location.
· Washington: Now has the highest statewide minimum wage at $16.66 per hour.
* Minimum wage is adjusted annually based on the Consumer Price Index.
Other states, such as Florida, Nevada, and Missouri, have scheduled increases set for later in the year.
How Can These Changes Impact Workers?
· Higher Earnings: Millions of low-wage workers will see an increase in take-home pay, helping them cover rent, groceries, and other essentials.
· Potential Job Market Shifts: Some businesses may adjust by reducing hours, hiring fewer employees, or increasing prices to offset labor costs.
· Improved Economic Activity: Higher wages often lead to increased consumer spending, boosting local economies.
· Impact on Small Businesses: While some small businesses may struggle to absorb the higher labor costs, others may benefit from increased consumer spending as workers have more disposable income.
· Effect on Tipped Workers: Some states have separate wage rules for tipped employees, ensuring they earn at least the minimum wage when tips are factored in. However, in some areas, tipped workers still receive a significantly lower base wage.
· Exemptions and Special Rules: Certain states have different wage structures for youth workers, seasonal employees, and specific industries. Workers should check local regulations to see if they qualify for the new rates.
Union and Advocacy Efforts
Worker advocacy groups and labor unions continue to push for higher wages across the country. Some states have already scheduled future increases, while others are considering ballot measures or legislative changes to boost wages further.
