Twenty-one states will increase their minimum wages on January 1, raising pay for more than 9.2 million workers by a total of $5.7 billion. In addition, 48 cities and counties will raise their minimum wages above their state wage floors, mostly in California, Colorado, and Washington.

The January 1 increases show that the minimum wage continues to be a powerful tool for combating racial and gender wage disparities, supporting working families, and reducing poverty. According to our analysis of state minimum wage increases:

• Women make up almost three-fifths (58.2%) of workers getting a raise.
• Black and Hispanic workers will disproportionately benefit. Black workers make up 9.1% of the wage-earning workforce in the states with increases, but are 11.3% of affected workers. Similarly, Hispanic workers are 19.5% of the workforce in these states, but 38.8% of the workers receiving wage increases.
• More than a quarter (25.7%) of affected workers are parents. More than 5.3 million children live in households where an individual will receive a minimum wage increase.
• Almost one in five (20.4%) affected workers are in families with incomes below the poverty line, and nearly half (48.5%) have family incomes below twice the poverty line.

Further, higher minimum wages help working people with a range of education levels and at different points in their lives and careers:

• Although teenage workers are disproportionately likely to be minimum wage workers, the vast majority (88.0%) of affected workers are adults.
• Half (50.4%) of affected workers are full-time workers, and 86.5% of affected workers work at least 20 hours per week.
• More than two-fifths (41.4%) of affected workers have completed at least some education beyond a high school degree.

Most January increases are the result of state laws that index the minimum wage to inflation. Thirteen states are increasing their minimum wages through automatic annual inflation adjustments, containing more than half (56.2%) of the workers affected by this year’s increases. The average full-time affected worker in these states will make around $400 more annually (see Table 1).

These additional earnings are critical for ensuring workers don’t lose ground due to rising prices, but the minimum wage level may still be too low, especially if the minimum wage was indexed years ago and not revisited since. For instance, Ohio’s minimum wage will increase from $10.45 to $10.70 due to an inflation adjustment, but the last time the state made a significant real increase to its minimum wage policy was 2007. According to EPI’s Family Budget Calculator, there is no county where an Ohio worker can earn less than $17.73 an hour and maintain a modest, but adequate, standard of living.1 State policymakers should regularly scrutinize their state’s minimum wage to make sure it provides economic security.

Workers in states implementing minimum wage increases through ballot measures and legislation will receive larger pay increases. On average, full-time affected workers in ballot measure and legislation states will earn $868 and $701 more per year, respectively. The largest state increase taking effect in January will be in Delaware, where legislation will lift the minimum wage by $1.75 to $15.00 per hour. As a result, the average full-time worker affected by the increase will earn $1,200 more annually.

As shown in Table 2, minimum wages in Delaware, Illinois, and Rhode Island will reach $15.00 an hour, meaning that 10 states and Washington D.C. will have minimum wages at or above $15.00. These 11 jurisdictions contain a third (33%) of all U.S workers.2 Further, after successful minimum wage ballot measures in Alaska and Missouri, nearly half of U.S workers will live in states with at least a $15 minimum wage by 2027.3

States can go much further in setting strong wage standards for tipped workers. The tipped subminimum wage is an enduring exception to the regular minimum wage in both federal and many state laws. The tipped minimum wage is rooted in the country’s history of slavery and continues to expose many tipped workers to greater levels of poverty and economic exploitation. While five states (AK, CA, MN, MT, WA) with January increases do not have a tipped worker carve-out, another five states (CT, DE, NE, RI, VA) are not increasing their tipped minimum wages at all. In nine states with January increases, the tipped minimum wage is less than half the value of the regular minimum wage.

Localities lead the way on strong wage floors

The January increases also show that cities and counties, particularly in California, Colorado, and Washington, continue to be leaders in setting ambitious minimum wage policies. As shown in Table 4, 29 cities and counties in California will increase their minimum wages in January, with every locality that is raising their wage reaching at least $17 an hour except in Oakland. In Colorado, four localities are increasing their minimum wages, including Denver where the minimum wage will be $18.81 an hour in 2025. Notably, unincorporated Boulder County is scheduled to reach $25 an hour by 2030. In Washington state, seven localities are raising their minimum wages. Tukwila, WA, will have the highest minimum wage in the nation in 2025 at $21.10 an hour.

While the federal minimum wage continues to stagnate, state and local lawmakers have recognized the need to lift wages for millions of workers. In many places, more ambitious minimum wages are being used to shape a more equitable economy where workers are more likely to earn a dignified living wage. This past year, California implemented its first sectoral wage standard, with the state’s new fast-food council—composed of representatives from labor, business, and the state government—establishing a $20 minimum wage for fast-food workers. The new policy has resulted in higher pay for workers with no measurable decrease in employment, adding to the consensus of the highest quality economic minimum wage research.

These increases will provide more economic security for millions of workers in 2025, but there are still tens of millions of workers in states with unchanging minimum wages that are being paid exceptionally low wages. Even in states where increases are taking place, there is still a need to deliberately secure living wages for low-wage workers and eliminate harmful carve-outs like the tipped minimum wage.

Notes

1. Costs for a one adult, no children household. Value assumes that all income comes from wages. Another approach is to assume that 81% of income is coming from wages, in which case the lowest county living wage in Ohio would be $14.36 an hour.

2. EPI analysis of Current Population Survey microdata.

3. Virginia could also increase its minimum wage to $15 an hour by 2026 but requires reauthorization by the state legislature and governor. If Virginia does follow through with its scheduled increase, more than half of U.S. workers will live in a state at or above $15 an hour in 2027.