Which US states will raise the minimum wage in 2023?

Come January, workers in two dozen states that get paid the minimum wage will see a raise. Three others and the District of Columbia will follow suit later in 2023.

Three states will raise their minimum wage to $15 or more joining California and the District of Columbia as well as a handful of municipalities that have already mandated the sought for level. That amount is more than twice the federal minimum wage of $7.25 per hour which has been in place since the summer of 2009.

States raising the minimum wage

While the federal minimum wage has been stuck at its current level, since 2014 over two dozen states and Washington DC have raised their own base hourly wage. They are joined by 46 localities across the nation that also require employers to pay their workers above the federally mandated level.

The most recent measures were passed in Nebraska, Nevada and the District of Columbia. A Ballot measure was approved in Nebraska in November to increase the minimum wage to the $15 per hour level by 2026. Nevada will increase theirs to $12 for all workers regardless of whether they have qualifying health insurance removing the Silver State’s two-tier system.

The measure in Washington DC will by 2027 match hourly pay for tipped workers with the current pay floor of $16.10 per hour that non-tipped workers receive from the current $5.35 and get rid of the tip credit.

Michigan is a bit complicated due to some shenanigans by the state legislature. The minimum wage will rise to $10.10 at the beginning of the year. However, depending on the final resolution of an appeal to a decision that found the changes to the state’s minimum wage law unconstitutional. If upheld the minimum wage could be raised later in 2023 to $13.03 for non-tipped workers. And $11.73 an hour for tipped employees from $3.75, whose hourly wage will rise 1 January 2023 to $3.84 . A decision is expected in January but a stay is in place until 19 February 2023.

States are automatically adjusting minimum wage to match inflation

Of the 30 states and Washington DC that have laws setting their minimum wage higher than the federal base, eleven of them and Washington DC now index their set minimum wages. Eight more will do so once they reach a new baseline minimum wage.

Currently there are just over a half a dozen states that have a minimum wage over $13 per hour. But through indexing and scheduled increases that number will grow to at least 14, including DC, in 2023. These are primarily in the Northeast and on the West Coast.

$15 an hour probably not enough to keep households afloat

A study released by Oxfam America, an anti-poverty advocacy group found that 52 million Americans, one in three, were earning less than $15 per hour. However, even those who are lucky enough to live somewhere that has a higher baseline pay are probably still struggling.

According to MIT’s Living Wage Calculations the living wage in the US is $24.16 per hour before taxes for a family of four. That estimate is nearly $3 per hour higher than the year before. While the cost of living varies from state to state and urban versus rural areas, generally the places that have the highest minimum wage also have the highest cost of living.