Minimum wage increases in 20 states and localities are helping to protect workers and their families from higher prices.

On July 1, three states, 16 cities and counties, and the District of Columbia raised their minimum wage. All these updates can be viewed in EPI Interactive Minimum Wage Tracker and in Table 1 and Table 2 below. At a time when families are coping with rising prices, this increase will help many low-wage workers and their families make ends meet.

State minimum wage increases

Connecticut, Nevada, Oregon, and the District of Columbia raised the minimum wage from $0.50 an hour in non-urban Oregon counties to $1 in Connecticut. New minimum wage levels in Connecticut ($14.00), Nevada ($10.50), and Oregon ($13.50) have been set in legislation passed over the past few years, while the minimum wage in the District of Columbia ($16.10) rose due to an automatic annual inflation adjustment built into the district’s minimum wage law. (Eighteen states and the District of Columbia, as well as dozens of cities and counties, have automatic annual inflation adjustment built into their minimum wage laws.)

Added to 21 states raised minimum requirements at the beginning of the year, a total of 24 states and the District of Columbia raised their minimum wage in 2022. Florida and Hawaii are also scheduled to raise their minimum wage in October. The increase in Hawaii will be the first of four increases recently adopted state legislators, eventually bringing the state’s minimum wage to $18 by 2028.

Three states and the District of Columbia raised the minimum wage July 1, 2022

State Previous low New minimum wage from July 1, 2022 Change amount Magnification type
Connecticut $13.00 $14.00 $1.00 Legislation
Washington $15.20 $16.10 $0.90 Inflation Adjustment
Nevada $9.75 $10.50 $0.75 Legislation
Oregon (Portland urban growth boundary) $14.50 $14.75 $0.25 Legislation
Oregon (non-urban counties) $12.00 $12.50 $0.50 Legislation
Oregon (state balance) $12.75 $13.50 $0.75 Legislation

Notes: “Legislation” indicates that the new rate has been set by the legislature. “Ballet” means that the new rate was set by a vote initiated by the voters. “Inflation Adjustment” indicates that the new rate has been set using a formula that reflects price changes from the previous year.

Source: EPI compilation of minimum wage data from state and local agency websites, state and local ordinances.

Increase in local minimum wage

In addition to the statewide increase, 16 localities raised their minimum wages, bringing the total number of cities and counties to 44 by 2022. The increase ranged from $0.40 in Chicago, Illinois to $1.11 in Pasadena, California. While July 1 is increasing in Minneapolis and St. Louis. Paul, Minnesota, were scheduled in accordance with city ordinances, all other local increases are automatic annual inflation adjustments. Laws that automatically raise the minimum wage to adjust for inflation every year ensure that minimum wage workers can buy at least the same amount of goods and services year after year.

Many minimum wage workers, especially those who support families, struggle to make ends meet. Even with the increase taking effect this month, the minimum wage across the country will be far from enough for workers to achieve economic security. For example, in Chicago, where the minimum wage increased to $15.40, a full-time minimum wage worker would receive an additional $832 in wages, for a total of $32,032 per year. However, according to EPI Family Budget Calculator— Which uses localized pricing data to calculate what people and families of all sizes need to achieve a modest but adequate standard of living — A Cook County resident with no children needs $39,204 a year to meet the household budget threshold. A worker with one child needs $62,959 a year for this modest standard of living. Notably, the Household Budget Calculator data reflects 2020 prices and thus does not account for the increase in the cost of living over the past 18 months, meaning that low-wage workers and their families may be even further from economic security today than these data suggest.

Sixteen cities and counties raised their minimum wage July 1, 2022

State Location Previous low New minimum wage from July 1, 2022 Change amount Boost Type
California Alameda $15.00 $15.75 $0.75 Inflation Adjustment
California Berkeley $16.32 $16.99 $0.67 Inflation Adjustment
California Emeryville $17.13 $17.68 $0.55 Inflation Adjustment
California fremont $15.25 $16.00 $0.75 Inflation Adjustment
California Los Angeles $15.00 $16.04 $1.04 Inflation Adjustment
California Los Angeles County $15.00 $15.96 $0.96 Inflation Adjustment
California Malibu $15.00 $15.96 $0.96 Inflation Adjustment
California Milpitas $15.65 $16.40 $0.75 Inflation Adjustment
California Pasadena $15.00 $16.11 $1.11 Inflation Adjustment
California San Francisco $16.32 $16.99 $0.67 Inflation Adjustment
California Santa Monica $15.00 $15.96 $0.96 Inflation Adjustment
Illinois Chicago $15.00 $15.40 $0.40 Inflation Adjustment
Illinois Cook County $13.00 $13.35 $0.35 Inflation Adjustment
Maryland County of Montgomery $15.00 $15.65 $0.65 Inflation Adjustment
Minnesota Minneapolis $14.25 $15.00 $0.75 city ​​ordinance
Minnesota St. Paul $12.50 $15.00 $2.50 city ​​ordinance

Notes: The “City Ordinance” states that the new rate was set by the city council. “Inflation Adjustment” indicates that the new rate has been set using a formula that reflects price changes from the previous year.

Source: EPI compilation of minimum wage data from state and local agency websites, state and local ordinances.

Does raising the minimum wage lead to higher inflation?

Research shows that higher minimum wages only marginally affect prices in industries that employ many low-paid workers and do not significantly affect overall price increases in the economy. For example, a study examining the impact of a 25 percent minimum wage increase in San Jose. in 2013 found that restaurants raised their menu prices by only 1.45%, even though the average weekly salary of a restaurant worker increased by 5.5%. Similarly, researchers at the Upjohn Institute looked at all state and local minimum wage changes across the country between 1978 and 2015. found that for every 10% increase in the minimum wage, prices in the affected region rose by an average of 0.36% at a time.“A trivial amount compared to the increase in the wages of the affected workers received.

Higher minimum wages have little effect on headline inflation, simply because for most of the goods American households buy, local low-wage labor simply does not make up a significant portion of production and distribution costs. The higher minimum wage has no measurable impact on global oil and gas production, global grain supplies, global transportation costs, or the production of cars, timber, semiconductors, or any number of other goods that have been in short supply over the past 18 months.

Like FIR Josh Bivens explainsThe current high rate of inflation is the result of global supply chain disruptions caused by the pandemic, huge discrepancies in what households wanted to buy and what suppliers were able to provide quickly, and corporations seizing the moment to make more profit than usual. Over the past year, wage growth for workers has lagged far behind inflation, which means that labor costs are not the main driver of the recent price hike — at least not they slow down the rate of inflation.

Any increase in wages caused directly by an increase in the minimum wage is negligible compared to total consumer spending. One simple illustration of this is to consider what would happen if the United States introduced a $15 minimum wage. In a March 2021 article, we calculated that raising the federal minimum wage to $15 by 2025 raise the wages of 32 million low-wage workers across the country.providing affected workers with approximately $108 billion in additional wages over a five-year period. US consumer spending is more than 16 trillion dollars a year“This means that even if affected businesses pass on to consumers all of the additional labor costs resulting from a one-year minimum wage increase, that would be less than 0.7% of what US consumers buy. In other words, even in the most extreme and unlikely scenario, the one-time price change will be less than 1%.

In short, at a time when many low-wage workers and their families are facing rising costs, the minimum wage hikes taking place in states, cities and counties across the country will help many of them keep up with the times. In addition, workers in jurisdictions whose minimum wage laws provide for automatic annual inflation adjustment will continue to be protected from future price increases. Raising the minimum wage increases the wages of low-paid workers and does not have a significant impact on inflation.


Note

Oregon’s minimum wage legislation sets different increase schedules for three regions of the state: Portland’s urban growth line, out-of-town counties, and the rest of the state.