To begin the New Year, 21 states will raise their minimum wage. Businesses across the United States are hopeful that the increase will boost consumer spending and strengthen businesses and local economies.
In 2025, 15 states plus Washington D.C. have scheduled minimum wage increases to $15 or higher, according to a press release.
“The economy will get a shot in the arm when states raise their minimum wage to start the new year,” said Holly Sklar, CEO of Business for a Fair Minimum Wage, said. “Businesses depend on customers who make enough to buy what they are selling, from food to car repairs.”
November 2024 ballot initiatives in Missouri and Alaska helped raise the minimum wage and enable workers to earn paid sick leave. Business owners in both states worked with Business for a Fair Minimum Wage to help get the initiatives passed with 58 percent of Missouri voters and 58 percent of Alaska voters approving the wage increases, according to a press release.
“The minimum wage has not kept up with the cost of living. The economy will improve when working people are not struggling for subsistence,” Ben Millstien, owner of Kodiak Island Brewing in Kodiak, AK, said. “The minimum wage was created to be a livable wage. It’s time to reapply that standard. As the late Senator Paul Wellstone put it, ‘We all do better when we all do better.’ That’s been true in how we run our business and retain our employees. Ballot Measure 1 will help all Alaska do better.”
Several state increases to begin on Jan. 1 include:
- Alaska increases to $11.91 on Jan. 1, 2025 and then, in accordance with Ballot Measure 1, it increases again to $13 on July 1, 2025. It increases to $14 on July 1, 2026, $15 on July 1, 2027, followed by annual indexing resuming January 1, 2028.
- Delaware increases to $15 on Jan. 1, 2025.
- Illinois increases to $15 on Jan. 1, 2025.
- Michigan increases to $10.56 on Jan. 1, 2025 and then to $12.48 on Feb. 21, 2025 in accordance with a 2024 ruling by the Michigan Supreme Court. The minimum wage is scheduled to increase to $13.29 on Feb. 21, 2026, $14.16 in 2027 and $14.97 in 2028, followed by annual indexing.
- Missouri, with the passage of Proposition A, increases to $13.75 on Jan. 1, 2025, $15 in 2026, and then is indexed annually.
- Nebraska increases to $13.50 in 2025 and $15 in 2026, and then is indexed annually.
- New York increases on Jan. 1, 2025 to $16.50 in New York City, Westchester County and Long Island and $15.50 in the rest of the state, followed by 50-cent increases in 2026 to $17 and $16 respectively. Indexing begins in 2027.
- Rhode Island increases to $15 on Jan. 1, 2025.
Washington will have the highest state minimum wage of $16.66 as of Jan. 1. Florida plans to increase the minimum wage to $14 on Sept. 30 and eventually to $15 in 2026.
Business owners and executives in many states where minimum wages are increasing said the raise will also increase productivity, improve hiring, employee retention and customer service.
“Our brand reflects our deep commitment to the city we love,” Randy Vines, owner of STL-Style in St. Louis, MO, said. “We believe the city’s unique local flavor is a source of pride that we should appreciate and support. We also feel the same about our employees, and we show them by offering better pay and benefits like paid time off. Boosting morale means better service, more creativity and higher productivity, and that’s a win-win for everyone. This ballot initiative will help all Missourians make a better living in St. Louis and throughout our state.”
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