Minimum Wages Increase in 20 States

Increases range from 8 cents to $1.50 an hour.

January 05, 2021

SAN FRANCISCO—Twenty states have raised their minimum wage rates for the new year to adjust for cost-of-living gains or to slowly move toward larger goals, such as a $15-an-hour minimum pay, CNN reports. This impacts a variety of employees and employers within the foodservice and entertainment industries.

On Jan. 1, New Mexico’s minimum wage increased to $10.50, up $1.50 from a $9 minimum wage. In California, the rate for employers with 26 workers or more went from $13 to $14 an hour, the highest state-wide baseline in the country. For Minnesota workers, the gain is just 8 cents, to a $10.08 hourly rate for large employers. According to NACS State of the Industry data, the average full-time associate wage in the convenience industry is $11.75.

The federal minimum wage of $7.25 per hour has not changed since 2009, and as of 2021, 20 U.S. states will continue to have a minimum wage either equal to or below the federal level, making $7.25 the default baseline. The value of the federal minimum wage peaked in 1968 when it was $1.60, which would be worth about $12 in 2020 dollars.

"We have lots of low-wage, service workers who are working through the COVID crisis, many of whom are in jobs with a greater risk of transmission," said Ken Jacobs, chair of the Center for Labor Research and Education at the University of California-Berkeley. "This will be a very welcome boost for them."

Minimum wage workers are typically younger and predominantly have jobs in the leisure and hospitality sector, according to federal data. These businesses have been rocked throughout the pandemic as public health and safety measures have triggered closures of foodservice retailers, hotels and entertainment venues. The pandemic has increased housing and food insecurity and caused incomes to fall.

In Michigan, the pandemic likely will stymie efforts to boost the state minimum wage, because state law prohibits scheduled minimum wage increases when the state's annual unemployment rate is above 8.5%. Although the jobless rate has recently improved in Michigan, it averaged 10.2% from January through October, it's “highly unlikely” the annual average will drop below the 8.5% threshold, according to the state's Bureau of Employment. As a result, Michigan’s minimum wage will remain $9.65 versus rising to $9.87.

Public support appears to be growing for minimum wage increases. As NACS Daily reported last month, Florida passed a measure to raise the state's minimum wage to $15 per hour by 2026—up from $8.56 this year, and that is expected to encourage proponents in some Republican-controlled states to revive efforts to get wage increases on their ballots.

Most of the minimum wage gains have occurred at a state, city or business level and have included companies, such as Target and Amazon, offering $15-an-hour pay. President-elect Joe Biden wants to raise the federal minimum wage to $15 an hour, but it's unlikely he'll have filibuster-proof support in the Senate to achieve that. He could, however, raise the minimum wage to $15 an hour for federal contractors through an executive order.

Below are all states raising wages as of Jan. 1:

  • Alaska – up 10 cents to $10.34
  • Arizona – up 15 cents to $12.15
  • Arkansas – up $1.00 to $11.00
  • California – up $1.00 to $14.00
  • Colorado – up 32 cents to $12.32
  • Florida – up 9 cents to $8.65
  • Illinois – up $1.00 to $11.00
  • Maine – up 15 cents to $12.15
  • Massachusetts – up 75 cents to $13.50
  • Minnesota – up 8 cents to $10.08
  • Missouri – up 85 cents to $10.30
  • Montana – up 10 cents to $8.75
  • New Jersey – up $1.00 to $12.00
  • New Mexico – up $1.50 to $10.50
  • New York – up 10 cents to $12.50
  • Ohio – up 10 cents to $8.80
  • South Dakota – up 15 cents to $9.45
  • Vermont – up 79 cents to $11.75
  • Washington – up 19 cents to $13.68
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