Millions of low-wage earners across the United States are set to receive pay raises as 21 states implement minimum wage hikes starting January 1, 2025.
The increases come as part of legislative efforts and inflation-based adjustments aimed at providing economic relief to workers in lower income brackets, CBS News reported. Analysts highlight the impact these raises could have on reducing poverty and improving financial stability for affected households.
According to data from the Economic Policy Institute (EPI), a nonprofit think tank, 13 of the states increasing their minimum wage are doing so in response to laws that tie wages to inflation. Additionally, six states are enacting pay hikes through legislation, while two others are implementing changes based on voter-approved ballot measures.
EPI estimates that approximately 9.2 million workers will benefit from these wage hikes, reported CBS. Notably, 20% of the affected workers live in households below the federal poverty line. Nearly 49% have family incomes below twice the poverty threshold.
Despite these state-level efforts, the federal minimum wage remains unchanged at $7.25 per hour—a rate that has been in place since 2009. Adjusted for inflation, the purchasing power of this wage has eroded by 30%, leaving millions of workers struggling to keep up with rising expenses. Economic analysts argue that the federal inaction has exacerbated wage disparities, disproportionately affecting workers in states that have not adopted higher minimum wages.
Sebastian Martinez Hickey, a state economic analyst at EPI, emphasized the limited reach of the federal minimum wage. He noted that while relatively few workers still earn $7.25 per hour, millions continue to face economic hardships due to stagnant wages and rising costs.
Currently, nearly one-third of U.S. workers live in states with a $15 minimum wage. As more states adopt higher wage standards, that proportion is expected to grow to nearly half by 2027.