8.4M Minimum Wage Workers Get Raise Jan. 1, 2023: Report

ACROSS AMERICA — Some 8.4 million U.S. minimum wage workers in half of U.S. states and the District of Columbia will get a raise in 2023, although in more than a dozen states, the hourly rate remains at the $7.25 federal minimum, according to Economic Policy Institute analyses.

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 25 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.

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.

With the changes, minimum wage workers will see an average earnings increase of about $536. On average, tipped employees’ wages will go up 35 cents an hour.

The 8.4 million workers who will get raises represent 11.4 percent of the 73.8 million workers nationwide. An estimated 5.7 million children, 15.6 percent of the nation’s children, live in households affected by the wage hikes.

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 federal minimum wage remains at $7.25 for non-tipped hourly workers, and the tipped-wage minimum is $2.13 per hour. Nearly 70,000 hourly federal government workers and employes of federal contractors earn $15 an hour under executive action taken early this year by President Joe Biden. He has urged Congress to increase the minimum wage to $15, but Democrats have seen defections from their party in attempts to pass it.

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.

Inequity Deepens

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