Minimum Wage to Rise in 21 States by New Year’s Day

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By the first day of the new year, more than half the states will have passed legislation raising the minimum wage above the federal minimum of $7.25 first established in 2009.

Four states approved minimum wage increases in the recent November elections:

  • Alaska will raise the minimum to $8.75 an hour effective February 24, 2015, and to $9.75 an hour on January 1, 2016, with automatic indexed increases beginning in 2017.
  • Arkansas is raising its minimum to $7.50 on January 1st (from $6.25), with $0.50 per hour increases in January of 2016 and 2017.
  • Nebraska is raising its minimum to $8.00 an hour effective January 1, and to $9.00 an hour on January 1, 2016.
  • South Dakota is raising its minimum to $8.50 on January 1st with automatic indexed increases beginning in 2016.

Seven additional states passed legislation during 2014 increasing the minimum wage above the federal minimum with the change becoming effective on January 1st: Connecticut, Hawaii, Maryland, Massachusetts, Rhode Island, Vermont, and West Virginia. New York’s minimum increases on New Year’s Eve.

In another nine states — Arizona, Colorado, Florida, Missouri, Montana, New Jersey, Ohio, Oregon, and Washington — indexed increases will take effect on January 1st.

In three other states and the District of Columbia minimum wage increases go into effect later in 2015: Delaware rises to $8.25 on June 1st; Minnesota rises to $8.00 on August 1st with further raises later; Michigan rises to $8.15 on January 1, 2016 with further rises scheduled; and D.C. rises to $10.50 on July 1st with further increases later.

According to the National Employment Law Project, the minimum wage increases occurring on or before New Year’s Day are expected to generate an additional $1.3 billion in economic growth as low-paid workers spend the higher wages on food, shelter, and other necessities. Later next the economic impact rises to at least $1.6 billion as increases in Delaware, Minnesota, and Nevada are triggered.

In addition to state-wide increases several U.S. cities have approved higher minimum wages starting in 2015. San Francisco, Seattle, San Jose, and Chicago are all raising the minimum to at least $10 an hour in 2015, with San Francisco topping the list with a rise to $12.25 on May 1st. Workers at Seattle-Tacoma Airport (SeaTac) will get the biggest hike of all, to $15.24 an hour beginning January 1, 2015.

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