Millions of low-wage earners are getting a raise in 2025 as 21 states are scheduled to raise their minimum wages starting Jan. 1.
State laws that index the minimum wage to inflation are behind 13 of the increases in January, according to the Economic Policy Institute, or EPI, a nonprofit think tank. Legislation spurred upcoming wage increases in six states, while ballot measures led to wage gains in two.
Nearly one in five, or 20 percent, of the more than 9.2 million affected workers live in households below the poverty line, while nearly half, or nearly 49 percent, have household incomes below double of the poverty line, EPI calculates.
Meanwhile, the federal minimum wage of $7.25 an hour has not increased since 2009 and remains the law in 20 states. Since then, this base rate has lost 30% of its purchasing power due to inflation, according to Sebastian Martínez Hickey, state economic analyst at EPI.
“The truth is that the number of workers making $7.25 an hour is pretty low, but that still means that by inaction we’re leaving tens of millions of workers out to dry,” Martinez Hickey told CBS MoneyWatch.
Nearly a third of workers live in states that have a $15 minimum wage, and by 2027 that percentage will expand to nearly half, Martinez Hickey said.
Ohio’s minimum wage rises to $10.70 from $10.45 due to an inflation adjustment, but there isn’t a single county in the state where a worker can earn less than $17.73 the hour and maintain a modest but adequate standard of living, EPI noted.
Oklahoma voters will have a chance to vote to gradually raise the state’s base hourly wage to at least $15 an hour, but not for another year and a half. Oklahoma Gov. Kevin Stitt signed an executive order in September setting the vote for June 2026.
In Maine, the minimum wage will rise to $14.65, an increase of 50 cents. The increase is due to Maine law and a 2016 citizen referendum, requiring the state to make an annual adjustment based on the Northeast cost-of-living index.
Other states with increases that will go into effect in 2025 are:
- Alaska’s minimum will be $11.91, up 18 cents, thanks to an inflation adjustment.
- Arizona workers will earn a minimum of $14.70 in January, up 35 cents, due to an inflation adjustment.
- California’s minimum will be $16.50, up 50 cents due to an inflation adjustment.
- Colorado’s base hourly wage rises to $14.81, up 39 cents, due to inflation.
- Connecticut workers will earn an hourly minimum of $16.35, an increase of 66 cents and adjusted for inflation.
- Delaware’s minimum will be $15.00, up $1.75, due to legislation passed by the state.
- Illinois is bringing its minimum to $15.00, an increase of $1.00, due to the legislation.
- Michigan’s minimum wage is set at $10.56, up 23 cents, because of the legislation.
- The Minnesota minimum is making an inflation-adjusted move to $11.13, up 28 cents.
- Missouri is bringing its base hourly rate to $13.75, up $1.45, thanks to a voter-approved ballot measure.
- Montana’s minimum will increase to $10.55, up 25 cents, due to inflation.
- Nebraska employers will have to pay at least $13.50 starting in January, up $1.50 because of a ballot measure.
- New Jersey’s hourly wage is rising to $15.49, up 36 cents, because of the legislation.
- New York’s minimum will be $15.50, up 50 cents, because of the legislation. It’s $16.50 in New York City, Long Island and Westchester.
- Rhode Island is raising its minimum to $15.00 as a result of the legislation.
- South Dakota’s minimum will reach $11.50 in 2025, a 30-cent increase, due to inflation.
- Vermont is looking at $14.01 for a minimum hourly rate in the new year, a 34-cent increase after an inflation adjustment.
- Virginia’s minimum will be $12.41, up from $12.00, due to inflation.
- Washington’s low will hit $16.66, up 38 cents, due to inflation.