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These states will raise their minimum wages in 2023

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Labor activists hold a rally in support of a national $15 minimum wage on May 19, 2021, in Washington, D.C.

Kevin Dietsch | Getty Images News | Getty Images

Because the calendar turns to 2023, employees in greater than half of all states have something to stay up for this 12 months: the next minimum wage.

That is occurring because the federal minimum wage stands pat at $7.25 per hour — the identical rate since 2009.

But many states and cities have put their very own rates in place, and most of them are poised to extend in the brand new 12 months.

A complete of 26 states have announced that higher minimum wages will likely be introduced during 2023, with another state prone to see an adjustment in July, in keeping with research from payroll experts at Wolters Kluwer Legal & Regulatory U.S.

Meanwhile, 23 states and Washington, D.C., in keeping with the Economic Policy Institute, will implement higher minimum wages on Jan. 1. Those increases, which is able to range from 23 cents to $1.50 per hour, will affect 8 million employees.

The state poised to supply the best minimum pay rate is Washington, at $15.74 per hour, in keeping with Wolters Kluwer.

Employees under the age of 16 in that state will likely be paid $13.38 per hour starting in 2023, or 85% of the adult minimum wage.

The minimum wage in Washington, D.C., will likely be $16.10 per hour.

Washington, D.C., and 13 states tie their minimum wages to the patron price index, a government measure for the typical change consumers pay for certain goods and services.

“There’s quite a couple of states across the country that will likely be seeing quite big jumps within the minimum wage due to the higher rate of inflation this past 12 months,” said Deirdre Kennedy, senior payroll analyst at Wolters Kluwer.

Other states will proceed to phase in increases passed through laws. States that should not seeing minimum wage hikes in 2023 still tie their base pay to the $7.25 per hour federal rate.

How the federal minimum wage affects employees

President Joe Biden has campaigned to boost the federal minimum wage to $15 per hour. He signed an executive order in 2022 raising it to that level for federal employees and contractors.

But a broader change to $15 per hour nationally would should be done through Congress. Efforts to boost the speed nationally did not make it into Covid-19 relief laws in 2021.

“Because the gap between that and the federal minimum wage increases, it’s going to be interesting to see if that may type of spur more momentum for more states to extend their wages or try to get more momentum on the federal level,” said Kevin Werner, research associate on the Income and Advantages Policy Center on the Urban Institute.

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Raising the minimum wage nationally to $15 per hour would affect 56 million employees, in keeping with an Urban Institute report released in September.

The research modeled possible results where a latest $15 minimum wage resulted in either no job losses and two different scenarios where prolonged job losses occurred.

“Even in our highest job loss scenario, we still found that on average, the typical employee was higher off, and that poverty declined overall,” Werner said.

“Despite the fact that some individual individuals who lost their jobs could have been worse off, the online effect was still positive,” he said.

There’s quite a couple of states across the country that will likely be seeing quite big jumps within the minimum wage due to the higher rate of inflation this past 12 months.

Deirdre Kennedy

senior payroll analyst at Wolters Kluwer Legal & Regulatory U.S.

The vast majority of employees who can be affected by a $15 minimum wage are over the age of 25, in keeping with Werner. About one-third are the only income earners for his or her families.

Employees who depend upon the minimum wage are also rather more prone to be people of color and living in poverty. Consequently, raising the minimum pay nationally would help vulnerable people, Werner said.

Raising minimum wages can even help increase consumer demand and put a refund into local economies, said Holly Sklar, CEO of Business for a Fair Minimum Wage, a national network of business organizations, owners and executives that support higher minimum wages.

“Putting needed raises in minimum wage employees’ pockets [is] really essentially the most efficient way you possibly can boost the economy,” Sklar said. “Those are the individuals who should go right back around and spend it.”

With federal motion to boost the minimum wage uncertain, some big name corporations have already stepped up to boost their pay rates.

Costco has raised its minimum wage for U.S. store employees to $16 per hour, while Goal, Amazon and Walmart have all moved to pay hourly employees $15 per hour.

Because the economy has continued to open up following the Covid shutdown, competition for employees has prompted employers to supply higher wages and starting bonuses for employees on the lower end of the income spectrum, Werner noted.

“It’s giving low-income employees more leverage than that they had before,” he said.

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