Here’s Why Over 8 Million Americans Will Get Pay Raises in the New Year
Thanks to an increase in minimum wages in several states starting on Jan. 1, 2023, more than 8 million American workers will get pay raises.
At the start of the new year, 23 states and Washington, D.C. will increase their minimum wages, raising pay for 8.4 million workers across the country, totaling more than $5 billion in workers’ wages, according to the Economic Policy Institute (EPI). Average annual raises will range from $150 in Michigan to $937 in Delaware, the EPI noted in its blog post.
In addition to these states, 27 cities and counties will also raise their minimum wages on Jan. 1.
“These increases — including those prompted by automatic inflation-linked adjustments, state law triggers, and legislative action — will benefit workers nationwide, from rural states such as South Dakota to coastal urban states like New Jersey, according to the EPI.
In terms of demographics, 54.9% of these workers are 25 or older, and 44.8% are full-time employees. In addition, women make up the bulk of the workers who will receive these hikes, with 58.7%. Minorities will also be affected by these hikes, as the most concentrated impacts are among Hispanic workers with 21.8%, Black workers with 12.2%, and multiracial and Native American workers with 14.4%.
“These increases will also have a meaningful impact for workers struggling to make ends meet: 23.2% of affected workers have incomes below the poverty line, while another 26.5% have incomes below twice the poverty line,” according to the post.
The EPI also noted more than 2 million parents will get a raise, including more than a million single parents.
Another key point is that two more states — Washington and Massachusetts — will raise their minimum wages to $15 or more. “They join California, Washington, D.C, and the NYC and suburban regions of New York as states with minimum wages at or above that threshold,” the post noted.
States that are set to hike minimum rates to $15 or more by 2026 include: Hawaii, Florida, Illinois, Nebraska, New Jersey, Connecticut, Delaware, Maryland, Virginia, and Rhode Island. Meanwhile, the federal minimum wage hasn’t increased from the $7.25 set in July 2009, according to the Department of Labor.
According to an earlier EPI post, the federal minimum wage’s purchasing power has dropped 27% because of increases in the cost of living, and in turn, its value is the lowest since 1956.
“Congress hasn’t raised the minimum wage in over 13 years. 30 states, D.C., and 46 localities have stepped up to raise their minimum wages, but we still need Congress to #RaiseTheWage and ensure all workers earn a living wage,” the EPI tweeted on Dec. 23.
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