Minimum wage hikes traditionally have been aimed at helping low-paid workers afford the basics, such as food, medicine and housing.
But a growing number of states and localities are raising their pay floors to $15 an hour or above, providing workers a somewhat larger financial cushion so they can not only pay for essentials with less of a struggle but also make some discretionary purchases.
Twenty-one states and 48 cities and counties are set to raise their minimum wages on Jan. 1, according to a report provided exclusively to USA TODAY by the National Employment Law Project, a worker advocacy group. Other states and a few more cities and counties will raise their minimum wages later in 2025.
While the pay floor bumps mark an annual ritual, the report highlights an acceleration in the size of minimum wage increases in recent years.
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“Remember that a full-time worker earning $17 per hour is only earning $35,360 annually pretax,” Yannet Lathrop, NELP’s senior researcher and policy analyst, wrote in an email. “Those wage levels won’t make workers wealthy, but they will help with paying for the basics, for a few luxuries (hopefully).”
She added, “Those higher wages may also improve their mental and physical health, their ability to access credit, and may lead to better educational outcomes of their children.”
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Alaska, Florida, Hawaii, Missouri and Nebraska will hit the $15 benchmark by 2026 or 2027. That makes 16 states with nearly half the U.S. workforce in states with pay floors of $15 or higher within the next three years, according to the National Employment Law Project and the Economic Policy Institute.
“Fifteen dollars is still the target rate,” Lathrop said. “It’s now the competitive rate.”
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Minimum wage increases in the past few years have helped Americans keep pace with annual inflation that reached a 40-year high of 9.1% in mid-2022 before gradually falling to 2.6% recently.
As a result of the laws, “Workers and their families don’t have to choose which bills to pay,” Lathrop said.
Yet none of the planned wage floors would meet the threshold of a “living wage” that would allow workers to afford basics such as food, child care, health care, housing, transportation, broadband, and other necessities, Lathrop said.
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Lathrop, though, says the issue transcends politics. This year, Alaska and Missouri, both Republican-dominated states, became the latest to pass ballot initiatives raising the minimum wage to $15 over the next few years.
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Read the full article at usatoday.com.
