2025 could be a much healthier year for many Americans. That’s because 21 states will increase their minimum wage for workers on January 1st of the new year — some more significantly than others — with more states to follow later in the year.
In 2025, a total of 23 states and 65 cities and counties will increase their base wages, affecting approximately 9.2 million American workers by a total of $5.7 billion.
Of course, salary increases will vary greatly from state to state and state to state. According to a report by the Economic Policy Institute (EPI), the states of California, Colorado and Washington lead the way when it comes to wide-ranging minimum wage increases. “29 California cities and counties will increase their minimum wage in January, with every locality raising the wage to at least $17 an hour except Oakland,” the report said.
Four counties in Colorado will increase their minimum wage, with Denver reaching $18.81/hour. Washington state will see minimum wage increase in seven areas – Tukwila, Washington will reach the highest in the nation at $21.10 in 2025. Boulder County will reach $25 an hour by 2030.
Other states will go up to $15 an hour for the first time in the new year. This is true for Illinois, Delaware and Rhode Island. Delaware will make the biggest jump in 2025 with a $1.75/hour increase to reach the $15/hour cap.
Of course, not every state makes such significant increases to the base salary. Ohio, for example, has not raised its minimum wage significantly since 2007, but will add just 25 cents to the hourly wage from $10.45 to $10.70 due to an inflation adjustment. “According to EPI’s Family Budget Calculator, there is no county where an Ohio worker can earn less than $17.73 an hour and enjoy a modest, but adequate, standard of living,” the report states.
Millions of workers will see bigger paychecks in 2025, either as a direct result of the wage increase or as a result of other future increases thanks to company pay structures. The majority of affected workers (58.2%) will be women. Black and Hispanic workers will also benefit more than others. Black Americans make up 9.1% of the workforce in states where wages are falling, but make up 11.3% of affected workers. 19.5% Hispanic, but Hispanic workers will see an increase of 38.8%. More than a quarter (25.7%) of affected workers are parents.
Experts say the increases, while moderately beneficial, won’t be life-changing. “Remember, a full-time worker earning $17 an hour only earns $35,360 before taxes annually,” said Yannet Lathrop, NELP’s senior researcher and policy analyst. USA Today. “These wage levels won’t make workers rich, but they will help pay for the basics, a few luxuries (hopefully).”
He added: “These higher wages can also improve their mental and physical health, their access to credit, and lead to better educational outcomes for their children.”
The federal minimum wage has not fallen below $7.25 an hour since 2009. About 20 states still use the rate, including 2024 battleground states Georgia, North Carolina, Pennsylvania and Wisconsin.
A new report estimates that nearly a fifth of the millions of workers who will be affected by the next minimum wage increase will have household incomes that would put them below the poverty line. Half (49%) are twice as low.
The full report, including each state’s 2025 minimum wage, can be found here.