Millions of workers in 21 states are set to get a raise at the start of 2025

Minimum wage increases are set to affect over 9 million workers across 21 states as the new year unfolds. Many of these states are implementing hikes to help achieve the long-anticipated $15 an hour target rate for minimum wage advocates. By starting January 1, these changes promise to provide significant benefits for lower-wage earners.

According to a report from the Economic Policy Institute (EPI), 14 of the 21 states with upcoming wage increases will adjust their minimum wage due to inflation as part of existing laws. Full-time workers in these states are projected to see an average annual earnings boost of $420. For instance, Missouri has approved a gradual increase to $15 an hour by 2026, prompting some business owners to prepare for increased labor costs, along with existing legal challenges to the initiative.

Nebraska is also on a similar path, with a minimum wage increase planned to reach $15 by 2026. Conversely, Alaska’s wage will rise to $11.91 in January due to inflation, with further increases scheduled through 2027 as mandated by a recent ballot measure.

In a regional context, Delaware and Virginia will be the only Southern states implementing minimum wage hikes in the new year, while others such as Georgia remain below the federal minimum wage of $7.25 per hour. This highlights a disparity in wage laws across the country, with many states defaulting to federal standards due to the absence of their own regulations.

While the federal minimum wage has remained unchanged since 2009, business owners like Mike Draper from RAYGUN are optimistic about the benefits of wage increases. Draper, who currently pays his employees a starting wage of $15.50, believes that enhancing workers’ pay directly contributes to their spending power and benefits local economies more effectively than other forms of cost increases.