Earning

Joe Biden aims to raise federal minimum wage to $15 an hour: Here's where things stand now in each state

When President-elect Biden takes office, he aims to double federal minimum wage — $7.25 since 2009.

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The federal minimum wage in the United States has been $7.25 since 2009, and the momentum to increase it has been growing among lawmakers. In 2019, the House of Representatives passed the Raise the Minimum Wage Act, which aims to gradually lift minimum hourly wages from $7.25 to $15 by 2025.

That initiative is popular with Democrats and increasingly so with Republicans as well. When President-elect Joe Biden, who supports the idea, takes office in January, he could have a chance to make it law.

American workers across the board are entitled to get paid at least the federal minimum, even though individual states can implement their own laws. But if a state's minimum wage is less than the federal one, employees receive the higher of the two.

Florida's new $15 wage law 'sent a clear message'

A number of states have already passed legislation to make the local minimum wage $15/hour. Florida is the most recent: Over 60% of residents in the Sunshine State just voted in favor. That means more Floridians agreed about the importance of a higher minimum wage than voted for either presidential candidate. President Donald Trump received about 51% of the popular vote in Florida while the former vice president garnered 47%.

"Florida's amendment to raise the minimum wage … sent a clear message to Washington that there is strong support across the country and across the political spectrum," Holly Sklar, the chief executive officer of Business for a Fair Minimum Wage, tells Grow. "Floridians voted for shared recovery and a more resilient economy. It's a win-win for workers and businesses."

The result "says a lot about how much voters in both parties are looking for government and policymakers to do something about the state of wages in America right now," David Cooper, senior economic analyst at the Economic Policy Institute, said recently. "People want to see their paychecks grow, and this is a very easy, straightforward way to do it for a lot of people."

The wage hike won't happen overnight, though. Similar to other states with $15 minimum wage laws (California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, and New York), Florida's increase will happen incrementally. Currently, the minimum wage there is $8.56 an hour. That will hit $10 on September 30 next year and increase $1 each year until 2026.

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State wage increases for 2021

While minimum wage hasn't gone up on a federal level since 2009, 25 states are adding pay increases in 2021, according to the U.S. Department of Labor. Many areas will see relatively small raises of as little as 10 cents to compensate for inflation or an increased cost of living. But some will usher in bumps of more than $1 per hour. Here's a look at what's changing.

Alaska 
2020 hourly minimum wage: $10.19
2021 hourly minimum wage: $10.34

Arizona 
2020 hourly minimum wage: $12
2021 hourly minimum wage: $12.15

Arkansas 
2020 hourly minimum wage: $10
2021 hourly minimum wage: $11

California 
Businesses with fewer than 25 employees must follow the new minimum wage order of $13 per hour. Employers with 26 or more employees must comply with the increased standard rate of $14. A number of cities and counties in the state will also reach $15 or more in 2021.

Colorado 
2020 hourly minimum wage: $12
2021 hourly minimum wage: $12.32

Connecticut
2020 hourly minimum wage: $12
2021 hourly minimum wage: $13

Delaware
2020 hourly minimum wage: $9.25
2021 hourly minimum wage: $10.25

Florida
2020 hourly minimum wage: $8.56
2021 hourly minimum wage: $10

Illinois 
2020 hourly minimum wage: $10
2021 hourly minimum wage: $11

Maine
2020 hourly minimum wage: $12
2021 hourly minimum wage: $12.15

Maryland 
Businesses with fewer than 14 employees must follow the new minimum wage order of $11.60 an hour in 2021, up from $11 in 2020. Employers with 15 or more will go from $11 to $11.75.

Massachusetts
2020 hourly minimum wage: $12.75
2021 hourly minimum wage: $13.50

Florida's amendment to raise the minimum wage … sent a clear message to Washington that there is strong support across the country and across the political spectrum.
Holly Sklar
chief executive officer of Business for a Fair Minimum Wage

Michigan
2020 hourly minimum wage: $9.65
2021 hourly minimum wage: $9.87

Minnesota
Large employers in the state will increase minimum wage from $10 per hour in 2020 to $10.08 in 2021. Small businesses will go from $8.15 to $8.21.

Missouri
2020 hourly minimum wage: $9.45
2021 hourly minimum wage: $10.30

Montana 
2020 hourly minimum wage: $8.65
2021 hourly minimum wage: $8.75

Nevada
2020 hourly minimum wage: $9
2021 minimum wage: $9.75

New Jersey
2020 hourly minimum wage: $11
2021 hourly minimum wage: $12

New Mexico
2020 hourly minimum wage: $9
2021 hourly minimum wage: $10.50

New York
2020 hourly minimum wage: $11.80
2021 hourly minimum wage: $12.50

Ohio
2020 hourly minimum wage: $8.70
2021 hourly minimum wage: $8.80

Oregon
2020 hourly minimum wage: $12
2021 hourly minimum wage: $12.75

South Dakota 
2020 hourly minimum wage: $9.30
2021 hourly minimum wage: $9.45

Vermont
2020 hourly minimum wage: $10.96
2021 hourly minimum wage: $11.75

Washington, D.C.
The district of Columbia's 2020 minimum wage is $15/hour. Starting July 1, 2021, it will increase its minimum wage annually in line with the annual average increase in the Consumer Price Index for All Urban Consumers in the Washington Metropolitan Statistical Area.

Washington State
2020 hourly minimum wage: $13.50
2021 hourly minimum wage: $13.69

Raising wages can be good for business

The Raise the Minimum Wage Act was passed by the House, but it's not clear yet whether it can pass in the Senate, where Republicans hold a majority. Senate Majority leader Mitch McConnell said he would not take up the legislation when the House passed it in 2019. Democrats only gained one Senate seat in the 2020 elections, and control of the chamber will be decided by two runoff races in Georgia this winter.

Opponents of the increase argue potential consequences include higher prices for goods and services and would be bad for small businesses. A $15 minimum wage could lead to a loss of 1.3 million jobs, a 2019 Congressional Budget Office report noted. The data also underlines, however, that the raise would increase paychecks for roughly 17 million American workers and lift 1.3 million people out of poverty.

And some experts have been pleasantly surprised by the impact of a $15 minimum wage on big cities like New York. Studies on those areas so far "have shown that it hasn't had the negative effects that were feared," Nicole Hallett, an associate professor of law at the University of Buffalo who studies labor and employment law, told Grow in 2019.

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It seems the movement has more support among everyday workers than not: A recent Pew Research Center survey found that two-thirds of Americans support a $15 minimum wage.

Boosting base pay would be especially helpful for Black and Hispanic workers, according to an analysis from the Economic Policy Institute. And it could provide some needed support to those struggling to regain financial stability amid the pandemic, which has disproportionately affected women.

"We're in the longest period without a raise since the federal minimum wage was enacted in 1938," Sklar says. "A $7.25 minimum wage keeps workers in poverty, and that's bad for businesses as well as workers. Raising the minimum wage is a very powerful way to boost businesses and the economy, because it puts money in the hands of people who most need to spend it."

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