NFIB: State-by-State Minimum Wage Update

Editor’s Note: The following article was originally published by the National Federation of Independent Business (NFIB).

Small business owners know that when cities and states raise the minimum wage, it often leads to increased labor costs and tough choices. To reduce costs following a minimum wage hike, employers are often forced to make difficult decisions such as cutting jobs, reducing employees’ hours, or reducing benefits.

Members of the National Federation of Independent Business (NFIB) visited Washington, D.C., in July to talk about a bill to raise the federal minimum wage. In addition to the federal legislation, many local governments are considering similar plans to raise the minimum wage in cities and states across the nation.

NFIB research has shown this is a bad move for the small business economy, as does a recent study by the Congressional Budget Office. Here’s an update on where these laws stand across the country.

Trending Tactics

Over the years, proponents of a higher minimum wage have increasingly turned to ballot initiatives when they haven’t been able to secure victory through the legislature. Their focus also has broadened to include localities.

For example, several major cities-such as Seattle, Chicago, and San Francisco-have mandated minimum wage increases on their own, and Colorado recently passed legislation to allow local governments to establish their own minimum wages.

Measures That Took Effect This Year

According to the National Conference of State Legislatures, 18 states began 2019 with higher minimum wages, either because of automatic cost-of-living increases (*) or previously approved legislation or ballot initiatives (^). However, state wages may differ depending on business size or gross earnings. If you own a business in California, Minnesota, Missouri, Montana, New York, or Ohio, visit your state’s government workforce or labor website for details.

Below are current state rates and the cause of increase for those 18 states:

  • Alaska*: $9.89
  • Arizona^: $11
  • Arkansas^: $9.25
  • California^: $12
  • Colorado^: $11.10
  • Florida*: $8.46
  • Maine^: $11
  • Massachusetts^: $12
  • Minnesota*: $9.86
  • Missouri^: $8.60
  • Montana*: $8.50
  • New Jersey*: $8.85
  • New York^: $11.10
  • Ohio*: $8.55
  • Rhode Island^: $10.50
  • South Dakota*: $9.10
  • Vermont*: $10.78
  • Washington^: $12

Additionally, Michigan’s minimum wage increased to $9.45 on March 29. On July 1, Washington, D.C.’s minimum wage will increase to $14. Oregon’s minimum wage will increase to a standard rate of $11.25 for most of northwest Oregon, $11 for nonurban counties, and $12.50 for Portland Metro. Delaware’s minimum wage will increase to $9.25 on Oct. 1.

New Increases on the Horizon

So far in 2019 six other states-Illinois, New Jersey, New Mexico, Connecticut, Nevada, Maryland-have passed new increases.

  • Illinois: The hourly minimum wage rise to $9.25 on Jan. 1; $10 on July 1, 2020; and an additional $1 per hour every Jan. 1 through 2025 until the state’s minimum wage hits $15.
  • New Jersey: For most employers, New Jersey’s minimum wage will rise $1 per hour starting July 1, 2019 and continue to increase every Jan. 1 until the minimum wage reaches $15 in 2024.
  • New Mexico: The state’s base wage will increase to $9 on Jan. 1; $10.50 on Jan. 1, 2021; $11.50 on Jan. 1., 2022; and $12 on Jan. 1, 2023.
  • Connecticut: The hourly minimum wage will increase to $11 on October 1, 2019; $12 on Sept. 1, 2020; $13 on Aug. 1, 2021; $14 on July 1, 2022; and $15 on June 1, 2023.
  • Nevada: The hourly minimum wage will increase by 75 cents each year starting Jan. 1, raising the current wage to $9; $9.75 on Jan. 1, 2021; $10.50 on Jan. 1, 2020; $11.25 on Jan. 1, 2023; $12 on Jan. 1, 2024.
  • Maryland: The minimum wage will rise to $15 through gradual increases by 2025 for businesses with at least 15 employees, or in 2026 for businesses with fewer than 15 employees. Unlike some other states, the increases differ by business size.

The Debate Continues

While 32 total states have introduced legislation in 2019 to increase their minimum wage, two-Maine and New Hampshire-currently have active pending measures.