In 2023, workers in more than half of all states can look forward to a higher minimum wage.
According to research from payroll experts at Wolters Kluwer Legal & Regulatory U.S., 26 states have stated that higher minimum wages will be implemented in 2023, with one additional state likely to see a change in July.
Many states and cities have enacted their own rates, and the majority of them are set to increase this year.
Meanwhile, the Economic Policy Institute reports that 23 states and Washington, D.C. will raise their minimum wages on Jan. 1. These increases will effect 8 million workers and will range from 23 cents to $1.50 per hour.
According to Wolters Kluwer, Washington, which will have a minimum wage of $15.74 an hour, will have the highest minimum wage rates.
Starting in 2023, the state's minimum pay for workers under the age of 16 will be $13.38 per hour, or 85% of the adult minimum wage.
In Washington, D.C., the minimum wage will be $16.10 per hour.
A government indicator of the typical change in prices customers pay for specific goods and services, the consumer price index, is used to determine the minimum wages in Washington, D.C., and 13 other states.
People of color and those living in poverty are far more likely to be employed on the minimum wage. Therefore, increasing the federal minimum wage would benefit disadvantaged groups.
According to Holly Sklar, CEO of Business for a Fair Minimum Wage, a national network of business organizations, owners, and executives who favor higher minimum wages, raising the minimum wage can also help improve consumer demand and put money back into local economies.
President Joe Biden has fought for a $15 per hour federal minimum wage. In 2022, he signed an executive order boosting it to that level for federal employees and contractors.
However, a nationwide change to $15 per hour would require the approval of Congress. National efforts to boost the rate failed to bring it into COVID-19 relief legislation in 2021.
"As the gap between that and the federal minimum wage increases, it will be interesting to see if that can kind of spur more momentum for more states to increase their wages or try and get more momentum on the federal level," Kevin Werner, research associate at the Income and Benefits Policy Center at the Urban Institute, said.
A few well-known companies have already taken action to increase their pay rates. While Amazon, Target, and Walmart have all moved to pay hourly workers $15 per hour, Costco has upped its minimum wage for U.S. store employees to $16 per hour.
