Nineteen states have built in cost-of-living adjustments to their minimum wage. | Photo: Shutterstock
With the new year comes a round of minimum wage increases.
Nineteen states will see a wage bump on Jan. 1, 2026. And, for the first time, there will be more states with a minimum wage at or above $15 per hour than states adhering to the federal minimum of $7.25, according to the liberal-leaning Economic Policy Institute.
In the new year, Arizona, Colorado, Hawaii, Maine, Missouri and Nebraska will cross the $15 per hour threshold for the first time.
Among the highest rates will be in Washington state, for example, where the minimum wage is set to increase to $17.13 per hour, from the current $16.66.
Connecticut will raise its wage to $16.94 from $16.35 per hour. And California’s minimum wage will step up to $16.90 from $16.50 per hour.
The District of Columbia has the highest minimum wage, however, with a rate of $17.95 per hour, which took effect in July. D.C. doesn’t have another inflation-adjusted increase scheduled until July 2026.
There, labor advocates are campaigning for a ballot initiative in November that would raise the minimum wage to $25 per hour and eliminate the tip credit.
And California, of course, has a statewide minimum wage for fast-food workers at $20 per hour, which could also be increased in 2026 to adjust for inflation—though the council tasked with setting that wage has fallen dormant as it waits for the appointment of a new chair.
Across the U.S., the biggest statewide increase on Jan. 1 will be seen in Hawaii, where the minimum wage will jump from $14 to $16 per hour on a path to reach $18 per hour by 2028.
On average, the wage hike among the states due for increases at the start of the new year is about 70 cents per hour, according to Ballotpedia.
Twenty states use the federal wage minimum of $7.25 per hour, which has not changed since 2009.
Researchers at the conservative think tank the Employment Policies Institute (EPI) argue that the minimum wage increases inspired by the Fight for $15 movement from 2011 to 2019 have been job killers, reducing employment opportunities for young people and entry-level workers.
A report co-authored by economists Jeffrey Clemens and Michael Strain contends wage hikes have reduced employment rates among those with low levels of experience and education by more than 2.5 percentage points.
Rebekah Paxton, EPI’s research director, said in a statement, “This new study confirms what the vast majority of economists, workers and businesses. Have known for years. Steep wage hikes kill jobs, reduce employment opportunities and shutter businesses.”
A network of business owners known as Business for a Fair Minimum Wage, however, welcomes the wage hikes, saying putting more money in the pockets of consumers will increase spending, strengthen local economies and reduce employee turnover.
“Wage increases are a vital part of the solution to the affordability crisis,” said Holly Sklar, CEO of Business for a Fair Minimum Wage, in a statement. “It’s great news that 19 states are raising the minimum wage on Jan. 1 and more follow later in the year. The cost of food, housing and other necessities has risen sharply. Minimum wage increases boost the economy as workers are better able to afford necessities and spend more at local businesses.”
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