Twenty-one states are kicking off the new year by raising their minimum wage, and certain business owners are speaking out in support. These business leaders say the increases taking effect on Dec. 31 and Jan. 1 will boost consumer spending, reduce costly employee turnover, increase productivity and customer satisfaction, and strengthen local economies.
Six states (California, Illinois, Maryland, Massachusetts, New Jersey and New York) with minimum wage raises at the new year are on track to reach $15 an hour in coming years, and all businesses in New York City must pay at least $15 per hour as of Dec. 31, 2019.
Thousands of business owners and executives have signed Business for a Fair Minimum Wage’s statements supporting state and federal increases because they believe a higher wage floor will increase consumer buying power, foster a more stable and productive workforce, and strengthen businesses and communities.
“Twenty-one states are ringing in the New Year with minimum wage increases, and that’s great news for business and our economy,” says Holly Sklar, chief executive officer of Business for a Fair Minimum Wage. “It’s vital to remember that workers are also customers, and minimum wage increases boost the buying power of people living paycheck to paycheck. Minimum wage raises also pay off in lower employee turnover, reduced hiring and training costs, lower error rates, better productivity and happier customers.”
Pete Turner, Founder of Illegal Pete’s restaurant chain in Colorado and Arizona, points out that Illegal Pete’s is a champion for fair and sustainable employee wages.
“We understand firsthand the benefit in supporting a higher wage for businesses and the communities surrounding them,” Turner said. “We implemented the final phase of our Living Wage initiative in January 2019, raising our tipped minimum wage to $15/hr. Since then, the company has continued to grow, even earning a spot on the Inc. 5000 Fastest Growing Companies in the U.S. We continue to experience industry-leading low turnover rates, and our customers love supporting a business that takes care of its employees.”
Scheduled increases for Dec. 31, 2019 and Jan. 1, 2020 include:
Arizona increases to $12 on Jan. 1, 2020 and is indexed for annual cost of living increases starting in 2021
Arkansas increases to $10 on Jan. 1, 2020 and $11 in 2021
California increases to $13 on Jan. 1, 2020, $14 in 2021 and $15 in 2022. Small businesses with 25 employees or fewer have an extra year to comply, reaching $15 in 2023. After the minimum wage reaches $15 for all employees, it will be indexed for annual cost of living increases.
Colorado increases to $12 on Jan. 1, 2020 and indexed starting in 2021
Illinois increases to $9.25 on Jan. 1, 2020, $10 on July 1, 2020, $11 on Jan. 1, 2021, with future increases of $1 a year to reach $15 by 2025
Maine increases to $12 on Jan. 1, 2020 and indexed starting in 2021
Maryland increases to $11 on Jan. 1, 2020, with future increases to reach $15 in 2025. Small businesses with fewer than 15 employees reach $11 on Jan. 1, 2020, with future increases to reach $15 on Jan. 1, 2026.
Massachusetts increases to $12.75 on Jan. 1, 2020, with increases of 75 cents a year to reach $15 in 2023
Michigan increases to $9.65 on Jan. 1, 2020, with future small increases until it reaches $12.05 in 2030, “or a subsequent calendar year”
Missouri increases to $9.45 on Jan. 1, 2020, with future increases of 85 cents a year to reach $12 in 2023 and then indexed
New Jersey increases to $11 on Jan. 1, 2020, with future increases of $1 a year to reach $15 by 2024 and then indexed. Businesses with fewer than six employees increase to $10.30 on Jan. 1, 2020 and then rise more slowly to $15 in 2026.
New Mexico increases to $9 on Jan. 1, 2020, with future increases to $12 in 2023
New York City increases to $15 on Dec. 31, 2019 for businesses with 10 employees or fewer, putting all businesses in New York City at $15
Long Island and Westchester increase to $13 on Dec. 31, 2019, $14 in 2020 and $15 in 2021
The rest of New York State increases to $11.80 on Dec. 31, 2019 and $12.50 on Dec. 31, 2020. Annual increases starting in 2021 will bring the rest of New York to $15 on a schedule to be determined based on cost of living and other indices.
Washington state increases to $13.50 on Jan. 1, 2020 and indexed for annual cost of living increases starting in 2021
States with indexing where annual cost of living adjustments will take effect Jan. 1, 2020 include:
Alaska increases to $10.19
Florida increases to $8.56
Minnesota increases to $10
Montana increases to $8.65
Ohio increases to $8.70
South Dakota increases to $9.30
Vermont increases to $10.96
Looking ahead, Nevada, Oregon and the District of Columbia have increases scheduled for July 1, 2020 and Connecticut will raise its minimum wage on Sep. 1, 2020. D.C.’s minimum wage will reach $15 in July 2020 and Connecticut is phasing in a $15 minimum wage by 2023.
The federal minimum wage has been stuck at $7.25 an hour since July 24, 2009—the longest period in history without a raise. On July 18, 2019, the U.S. House of Representatives passed the Raise the Wage Act, which would increase the federal minimum wage to $15 by 2025, but the Senate has not acted.