Revised December 21, 2023

This summer, Connecticut, Nevada, Oregon, and Washington D.C. will raise their minimum wages, boosting pay for 765,000 workers who will collectively gain more than $615 million in wages. Meanwhile, 15 cities and counties will implement minimum wage increases, providing timely relief for low-wage workers facing rising prices. These updates can all be viewed in EPI’s interactive Minimum Wage Tracker and in Figure A and Table 1 below.

Beginning July 1, Oregon will increase its hourly minimum wage by $0.70 to $14.20, while Nevada’s will increase by $0.75 to $11.25. Washington D.C. will increase its regular minimum wage by $0.90 to $17.00 while increasing its tipped minimum by $2.00 to $8.00. Connecticut increased its minimum wage on June 1 by $1.00 to $15.00 an hour.

These increases will produce a welcome wage boost for low-wage workers in these states. If you take into account all affected workers—including workers directly receiving an increased minimum wage and those indirectly affected as employers adjust their wage ladders to the new minimum wages—we estimate the average change in hourly wages will be $0.40 in Nevada, $0.42 in Oregon, $0.57 in Connecticut, and $0.74 in Washington D.C. The average full-time minimum wage worker in Oregon will increase their wages by $675, while in D.C. that figure is $1,354.

Increasing the minimum wage continues to be a key policy for reducing inequality and creating a more equitable economy. For the workers impacted by the state increases, 19.6% are in poverty and 46.2% are below twice the poverty line. A disproportionate number of affected workers are women (57.6%), who make up less than half (48.4%) of the wage-earning workforce in the states with increases. Meanwhile, 13.7% of the affected workers are Black and 31.1% are Latino, despite making up 9.9% and 17.6% of the state workforces, respectively.

Most jurisdictions with minimum wage increases this summer are making automatic inflation-linked adjustments to their minimum wage, including all 15 localities and Oregon and Washington D.C. Connecticut’s and Nevada’s scheduled increases result from legislation each state passed in 2019. Adjusting the minimum wage for inflation helps protect the value of workers’ wages as prices increase. Since inflation has been high, the size of inflation adjustments is larger than has historically been the case, but still in line with regular scheduled increases to the minimum wage.

State minimum wage action means more workers will earn at least $15 an hour. Connecticut becomes the fourth state (joining CA, WA, and MA) with a minimum wage reaching or exceeding $15 an hour, in addition to Washington D.C. Oregon has three separate wage rates for different regions of the state, one of which (Portland Urban Growth Boundary) also exceeds $15 for the first time, increasing from $14.75 to $15.45 an hour. As the federal minimum wage continues to stagnate, the disparity between states continues to grow. Minimum wage increases to $15 an hour or greater have been endorsed by voters nationwide from Florida, Nebraska, and Hawaii1, yet 21 states still rely on the federal minimum wage as their wage floor. Even with recent wage growth for low-wage workers, workers in states operating at the federal minimum are 46% more likely to earn less than $15 an hour.

Creating equitable minimum wage policy also requires eliminating loopholes that allow employers to pay certain groups of employees less than everyone else. Notably, the lower “tipped minimum wage” is a long-standing weakness of the federal minimum wage and many state minimum wages that is fundamentally inequitable. Sixteen states maintain a tipped minimum wage at the federal minimum of $2.13 an hour, while another 13 have a tipped minimum below $5.00 an hour. The establishment of a tipped minimum wage not only has direct ties to slavery and its legacy, but the practice continues to often be discriminatory. The current makeup of the tipped workforce is predominantly women and people of color, meaning the harm of this “subminimum wage” continues to disproportionately fall along sexist and racist lines.

States can and have taken action to eliminate their tipped minimum wages. Nevada and Oregon are two of the seven states2 that have eliminated their tipped minimum wage, while District of Columbia residents overwhelmingly passed a ballot measure in 2022 to phase out D.C.’s tipped minimum wage by 2027. As a result of the ballot measure, D.C.’s tipped minimum is scheduled to increase from $6 to $8 an hour in July. However, restaurant industry groups are attempting to seek tax relief and other loopholes to undermine the higher tipped minimum, arguing that rising costs and outstanding debt from the pandemic make it too difficult for restaurants to implement the tipped increase. But most tipped workers are low-wage earners, meaning they are some of the most vulnerable workers to inflation and cost of living increases. The harm of maintaining a low tipped minimum is severe. In states with the federal tipped minimum, the poverty rate for bartenders and other tipped occupations is 66% higher than in the seven states where tipped workers get the regular minimum wage.

Despite the impacts of inflation, the post-pandemic economy is also characterized by a tight labor market that has produced historically fast wage growth for low-wage workers. Strong market-driven wage growth means fewer workers are being paid the minimum wage, a welcome (but temporary) development for low-wage workers. However, these favorable labor market conditions are also being used as justification to create more subminimum wage loopholes, particularly for workers younger than 18. Since 2022, Maine, Nebraska, and Virginia lawmakers have introduced legislation to create or further decrease subminimum youth minimum wages.

Business groups argue that setting lower youth minimums is necessary for businesses to justify hiring young people, who they argue may not have the skills of an adult worker. However, if the minimum wage was too high for businesses to hire youth workers, we would expect to see a corresponding increase in unemployment among youth workers. Instead, the unemployment rate for workers ages 16 to 24 is almost identical to the pre-pandemic period. Moreover, youth minimum wages are simply bad policy. Youth workers perform the same jobs as their older peers and deserve equal compensation.

The minimum wage increases implemented by states and localities this summer are essential for improving the lives of low-wage workers, addressing income inequality, and fostering a more equitable economy. These wage hikes will provide financial relief and protect workers from the impacts of inflation in a labor market that is inherently unequal. Furthermore, eliminating unequal subminimum wages is crucial for creating a fairer economy. Eliminating subminimum loopholes and pursuing higher minimum wages are a way of locking in the wage gains low-wage workers are experiencing and promoting economic justice.

Notes

1. Florida and Nebraska will raise their minimum to $15.00 an hour due to ballot initiatives. Hawaii passed legislation to go to $18.00 an hour by 2028.

2. AK, CA, MN, MT, NV, OR, WA.