Four states will have a $15-an-hour minimum wage by New Year’s Day, while 27 states are poised to raise the minimum wage in 2023.
Some states are enacting the wage change after Jan. 1, so by the end of 2023 there will be six states that are set to have minimum wages at or above $15 an hour. They are California, Connecticut, Massachusetts, New York, Oregon, and Washington, according to a report last week from the National Employment Law Project.
Other states are gradually implementing a $15-an-hour minimum over the course of several years, including Delaware, Florida, Illinois, Maryland, Nebraska, New Jersey, Rhode Island and Virginia, USA Today reported.
The federal minimum wage of $7.25 remains in place for 20 states.
The Congressional Budget Office found last year that raising the minimum wage to $15 an hour would increase the federal deficit by $54 billion over a decade due to the increase in prices for goods and services. Although about 900,000 fewer people would be in poverty, 1.4 million workers would lose their jobs, the report states.
Meanwhile, inflation over the summer placed the federal minimum wage at its lowest value in 66 years, according to the Economic Policy Institute. Inflation is still up 7.1% from last year, and some experts are concerned that increasing the minimum wage will fuel already high inflation.
“Wage increases cause inflation because the cost of producing goods and services goes up as companies pay their employees more. To make up for the increase in cost, companies must charge more for their goods and services to maintain the same level of profitability,” Investopedia economist Will Kenton wrote.
Pulitzer-prize winning economist Milton Friedman argued in 1966 that raising the minimum wage would harm minorities and low-paid and unskilled workers the most.
“The loss to the unskilled workers will not be offset by gains to others. Smaller total employment will result in a smaller total output. Hence the community as a whole will be worse off,” he said.
However, the Center for American Progress, a liberal think tank, maintains that “there remains little to no evidence that workers’ wages are causing today’s high inflation.”