Minimum Wage Hike Effective Jan. 1 Affects 273,000 MI Workers

MICHIGAN — Some 8.4 million U.S. minimum wage workers will get a raise in 2023, including 273,500 workers in Michigan, according to a recent Economic Policy Institute analysis.

The Economic Policy Institute, a Washington, D.C.-based nonpartisan, nonprofit research group that regularly tracks changes in the minimum wage, said its report reflects disparity in pay across the country, especially among women and workers of color, who make up the majority of low-wage employees.

The minimum wage will rise in 23 states and Washington, D.C. on New Year’s Day. Wages will increase by about $5 billion with the wage hikes, with annual earning increases of about $150 in Michigan to $937 in Delaware, according to the report from the Economic Policy Institute.

When the changes take effect, the state with the highest minimum wage will be Washington, with a starting hourly rate of $15.74.

In some cases, wage increases were prompted by inflation-linked adjustments. In others, they were automatically triggered by state law or by legislative action. In Washington, D.C., the tipped wage goes up by 65 cents due to a successful midterm election ballot measure calling for the elimination of the tipped wage by 2027.

In Michigan, the minimum wage and the minimum wage for tipped employees will increase to $10.10 and $3.84 an hour, respectively, up from $9.87 and $3.75 in 2022. The increase is triggered by legislation.

Michigan workers affected by the increases will see an average increase in their annual earnings of about $150, with an average change in their hourly wage of $0.11.

That’s 6.3 percent of Michigan's total workforce of 4,368,600. An estimated 193,400 children live in households affected by the wage hikes. They represent 8.9 percent of the children living in Michigan.

Additionally, 27 cities and counties, primarily in California, will increase their minimum wages on Jan. 1, which the Economic Policy Institute said will further increase the number of workers who are likely to see bigger paychecks in 2023.

The Economic Policy Institute said that because of long-standing discrimination and occupational segregation, the most concentrated effects are seen among:

• Hispanic or Latino workers, 21.8 percent (20.1 percent of the workforce);
• Black workers, 12.2 percent (9.5 percent of the workforce);
• Multiracial and Native American workers, 14.4 percent (2 percent of the workforce).

The minimum wage increases will “have a meaningful impact on workers struggling to make ends meet,” the think tank said in its release, noting that 23.2 percent of affected workers have incomes below the poverty line, and another 26.5 percent have incomes below twice the poverty line.

Other highlights from the report:

• About 55 percent of affected workers are those 25 and older, and nearly half (45 percent) work full time. Most of the affected workers have a high school diploma or less education, but about 41 percent have at least some college.
• More than 2 million parents will get a raise, including more than 1 million single parents. It’s estimated more than 5.7 million children live in households that will see an increase in earnings in 2023.
• The smallest increase will be in Michigan, where the minimum wage goes up 23 cents to $10.10 an hour.
• The biggest rate hike is in Nebraska, with a $1.50 an hour increase to $10.50 an hour.

The federal minimum wage remains at $7.25 for non-tipped hourly workers, and the tipped-wage minimum is $2.13 per hour.

According to a separate report from the Economic Policy Institute, more than a dozen states pay non-tipped employees at that rate. Among those states, some have increased the tipped wage above the federal minimum, notably in North Dakota and Iowa, where the minimum tipped wages are $4.86 and $4.35 an hour, respectively.

Two states — Wyoming and Georgia — have minimum wages below the federal minimum, at $5.15 each. Wyoming’s tipped wage minimum is $2.13 an hour, and Georgia hasn’t established one.

Alabama, Louisiana, Tennessee, Mississippi, South Carolina and Tennessee don’t set minimum wages.