Minimum wage workers in 24 states across the country will enjoy a pay bump in 2021, as a bipartisan group of state legislatures continue to hike wages for some of the country’s lowest earners.
New York will kick things off by raising its hourly minimum to $12.50 on Dec. 31. Another 20 states will raise their state-level minimum wages on Jan. 1, 2021, with three more expected to boost their wage floors at some point before the year’s end. Florida is upping its minimum wage twice in 2021: once on Jan. 1 and again on Sept. 30 thanks to Amendment 2, which voters approved on Election Day 2020. The Sunshine State is the first that will eventually raise its minimum wage to $15 per hour via ballot measure.
States with minimum wage increases in 2021:
|State||2020 Minimum Wage||2021 Minimum Wage||Effective Date|
|California (large employers)||$13||$14||1/1/21|
|California (small employers)||$12||$13||1/1/21|
|Minnesota (large employers)||$10||$10.08||1/1/21|
|Minnesota (small employers)||$8.15||$8.21||1/1/21|
|Montana (large businesses)||$8.65||$8.75||1/1/21|
|Nevada (with health benefits)||$8||$8.75||7/1/21|
|Nevada (without health benefits)||$9||$9.75||7/1/21|
|Ohio (large employers)||$8.70||$8.80||1/1/21|
|* Florida’s minimum wage will increase to $10 on 9/30/21.|
Excluding Washington, D.C.’s $15 hourly minimum wage, California has the highest in the country at $14 per hour. Washington and Massachusetts are close behind, with $13.69 per hour and $13.50 per hour, respectively.
A USAFacts analysis of Labor Department data estimates 1.7 million workers — roughly 2% of all hourly non-self-employed workers — earned wages at or below the federal minimum of $7.25 per hour in 2018. But in slightly more than half of states across the country, legislatures have lifted minimum base pay above that federal standard.
However, there are nuances to minimum wages in certain states such as Ohio and Minnesota, which recognize different wage structures depending on the size of an individual employer. In Nevada, minimum wages are determined in part by whether an employer offers health benefits to its workers.
Proponents of a higher minimum wage have cited cost-of-living increases since 2009, when the federal government boosted its benchmark to $7.25. Activists have regularly focused on a $15 per hour minimum wage as an acceptable standard.
Opponents, however, contend that a considerably higher minimum wage would strain small businesses and employers who don’t collect enough revenues to offset more substantial wage requirements. Republican lawmakers, in particular, have long fought against raising federal and state minimums. But the higher-wage crowd has made inroads in GOP strongholds such as Arkansas and South Dakota — each of which will see state-level minimums climb on the first day of 2021.
States with wages below the federal minimum:
Neither Georgia nor Wyoming has raised its minimum wage from $5.15 per hour, even after the federal government boosted the national minimum to $7.25. Because of the Fair Labor Standards Act, the majority of minimum wage workers in Georgia and Wyoming are paid $7.25 rather than $5.15 per hour. But certain farm and seasonal workers may earn the lower minimum.
States without minimum wage laws:
These five Southern states have not established state-level minimum wage policies, effectively defaulting to the national federal minimum of $7.25. Employers in these states must adhere to that federal benchmark and do not have the freedom to pay employees whatever they want.
What is the federal minimum wage?
The federal minimum wage is $7.25 per hour. Though tipped workers and some farm and seasonal workers are paid less in many states, pay for the vast majority of hourly employees in the U.S. is at least $7.25 per hour.
More than half of U.S. states and many individual cities have passed legislation raising that benchmark, but adjustments to the federal number have been few and far between in recent decades — even as inflation and cost of living in the U.S. have increased. On only three occasions has the federal minimum wage increased since 1981, according to a recent Congressional Research Service report. The most recent uptick came between 2007 and 2009, when the federal minimum was boosted in three steps from just $5.15 per hour.
Democratic lawmakers have long favored a federal minimum wage boost, but legislative efforts have fallen short during the past decade.
Do higher state minimums help or hurt the economy?
Many economists believe consumers and the U.S. as a whole would be helped — or, at the very least, wouldn’t be meaningfully hurt — by a slightly higher minimum wage. But it’s generally accepted that there’s a limit to how high wages can be raised without hurting employers and businesses.
The theory is that consumers would have more spending power and would more actively contribute to the economy with a higher minimum. That extra pay would also reduce the day-to-day stress of trying to make ends meet on limited income.
There have also been some arguments that higher wage floors could help alleviate pressure on social assistance programs for the impoverished. Several economists have previously argued for indexing the minimum wage to inflation to help account for cost-of-living increases — the argument being that $7.25 in 2009 went slightly further than it does now.
Others contend that higher wages would hurt employers, particularly the owners of small businesses who may not bring in enough money to afford higher wage minimums. One concern that’s been floated is that a higher minimum wage would reduce or limit the growth of minimum wage jobs across the country, because employers wouldn’t be able to afford to bring on extra workers. Individual employees might make more, but there may be fewer jobs to go around. Research supporting this premise has been inconclusive. Some studies have supported this theory, but others have suggested cities and states that have already seen minimum wage hikes haven’t seen meaningful employment consequences.
Analysts have not settled on an ideal federal minimum wage, in part because the cost of living varies considerably by city and state.
Where does the public stand on the issue?
Studies over the past decade have shown general support for a higher minimum wage — though enthusiasm is largely split along party lines.
A recent Pew Research Center study found that two-thirds of Americans favor a $15 federal minimum wage. Republican support (43%) was half that of Democratic support (86%). But more than half of Republicans (56%) with an annual family income of less than $40,000 said they support a $15 per hour minimum wage. Lower-income Republican and Democratic households were both more likely to support a higher federal minimum than their more wealthy counterparts.
More than 60% of men and 72% of women said they support a higher federal minimum. And 93% of Black respondents said the same, compared with 73% of Hispanic respondents and 60% of whites.
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24 U.S. States Will See a Minimum Wage Increase in 2021 originally appeared on usnews.com
Update 12/31/20: This article has been updated with new information.