Business owners around the country support upcoming minimum wage increases,
taking place in 20 states on Dec. 31 and Jan. 1, because they will help build a shared economic recovery
Twenty states will be raising their minimum wage to start the new year. Another four states have increases scheduled later in 2021. Business leaders across the country say minimum wage increases will boost consumer spending, strengthen local workforces and help build a shared economic recovery.
“The economy will get a shot in the arm when states raise their minimum wage to start the new year,” said Holly Sklar, CEO of Business for a Fair Minimum Wage. “Businesses depend on customers who make enough to buy what they are selling, from food to car repairs. Minimum wage increases will go right back into local economies, helping workers and businesses get through the pandemic and economic crisis. Let’s hope 2021 is also the year we raise the federal minimum wage, ending the longest period without an increase since 1938, when it was enacted to help our nation recover from the Great Depression.”
In November, Florida underscored the broad appeal of minimum wage increases by passing Amendment 2 , raising the state minimum wage to $15 by 2026, with a 61% supermajority. Florida, the first state to pass a $15 minimum wage by ballot initiative, joins California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey and New York, making eight states that are incrementally increasing their minimum wage to $15. Florida has two increases in 2021: a previously scheduled inflation adjustment on Jan. 1 and a Sept. 30 increase to $10 in the first step enacted under Amendment 2.
Business for a Fair Minimum Wage members below and others around the country are available for interviews.
Claude Luciani, owner of Pizza Rustica in Hollywood, Florida: “Paying a fair wage is one of the best things a business can do to build employee engagement and customer loyalty. This pandemic has reinforced how important dedicated employees are when it comes to safety protocols that protect our staff and customers. I was thrilled that Florida voted for a $15 minimum wage in November. I’m looking forward to the boost in consumer spending following the small wage increase on January 1, and looking forward even more to the larger raises that will take place as Amendment 2 kicks in.”
Kelly Vlahakis-Hanks, President and CEO of ECOS, with manufacturing plants in California, Illinois, New Jersey and Washington: “Paying a living wage has long been a key to our success. Now, during the pandemic, when we have scaled up production to meet global demand for our safer cleaning products, it’s more important than ever. When you take care of your team, they take care of your company and customers. We’re very glad to see minimum wage increases in all the states where we manufacture and many others across the country.”
Brian England, owner of BA Auto Care in Columbia, whose awards include Maryland Small Business of the Year: “As BA Auto Care has grown over the years, paying our employees fair wages and benefits has been central to our success. What we’ve paid in higher compensation, we have more than reaped in low employee turnover, long-term loyalty, excellent service, and high numbers of return customers and referrals. Maryland’s minimum wage increase will greatly help our state recovery, as the needed pay raise goes straight back into businesses and the community.”
Aaron “Blake” Ralston, owner of the American Income Life Ralston Agency in Arkansas: “I know from experience that fair pay is good for the bottom line. I supported the 2018 ballot measure to raise the minimum wage and I’m happy to see Arkansas take the final step to $11 on January 1. Now that Issue 5 is fully phased in, I’m hopeful Arkansas will again act to raise the minimum wage so we can build a stronger post-pandemic economy.”
Michael Kanter, co-owner of Cambridge Naturals, a Forbes Small Business Giant winner with stores in Cambridge and Boston, MA: “Businesses and workers have something to cheer this New Year’s as Massachusetts takes another step toward a $15 minimum wage. Customers will have more money to spend and employees will be more invested in helping businesses make it through the pandemic and beyond. Raising the minimum wage will help us revitalize our businesses, our communities and our economy. It’s just the kind of uplift we need.”
Scheduled increases for Dec. 31, 2020 and Jan. 1, 2021 include:
- Arkansas increases to $11 on Jan. 1, 2021
- California increases to $14 on Jan. 1, 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 adjusted annually for cost of living increases.
- Illinois increases to $11 on Jan. 1, 2021, with future increases of $1 a year to reach $15 in 2025
- Maryland increases to $11.75 on Jan. 1, 2021, with future increases to reach $15 in 2025. Small businesses with fewer than 15 employees reach $11.60 on Jan. 1, 2021, with future increases to reach $15 in 2026.
- Massachusetts increases to $13.50 on Jan. 1, 2021, $14.25 in 2022, and $15 in 2023
- Missouri increases to $10.30 on Jan. 1, 2021, $11.15 in 2022, $12 in 2023, and then is indexed for cost of living increases
- New Jersey increases to $12 on Jan. 1, 2021, with future increases of $1 a year to reach $15 by 2024, and then indexed. Businesses with fewer than six employees increase to $11.10 on Jan. 1, 2021 and then rise more slowly to $15 in 2026.
- New Mexico increases to $10.50 on Jan. 1, 2021, $11.50 in 2022 and $12 in 2023
- New York
- Long Island and Westchester increase to $14 on Dec. 31, 2020 and $15 on Dec. 31, 2021.
- The rest of New York State increases to $12.50 on Dec. 31, 2020. Annual increases will continue until the rate reaches $15. Starting in 2021, annual increases based on economic indices, including the Consumer Price Index, will be published by the Commissioner of Labor on or before Oct. 1.
- New York City already has a $15 minimum wage.
States with indexing where annual cost of living adjustments will take effect Jan. 1, 2021 include:
- Alaska increases to $10.34
- Arizona increases to $12.15
- Colorado increases to $12.32
- Florida increases to $8.65. On Sept. 30, 2021, the minimum wage will increase to $10. After reaching $15 in 2026, Florida will resume indexing.
- Maine increases to $12.15
- Minnesota increases to $10.08 for employers with an annual gross revenue of at least $500,000 and $8.21 for employers with less than $500,000
- Montana increases to $8.75
- Ohio increases to $8.80
- South Dakota increases to $9.45
- Vermont increases to $11.75
- Washington state increases to $13.69
Michigan is expected to stay at $9.65 on Jan. 1, 2021 because minimum wage increases are prohibited when the state’s annual unemployment rate for the preceding calendar year is above 8.5%. Michigan was scheduled to increase to $9.87 followed by small annual increases until reaching $12.05 in 2030 “or a subsequent calendar year.”
Looking ahead, Virginia will raise its minimum wage to $9.50 on May 1, 2021 (then $11 on Jan. 1, 2022 and $12 on Jan. 1, 2023; increases to $13.50 in 2025 and $15 in 2026 can take place if the General Assembly enacts them again by July 1, 2024). Nevada and Oregon have increases scheduled for July 1, 2021 and Washington, DC’s minimum wage, which reached $15 in July 2020, will increase pursuant to the Consumer Price Index. Connecticut will raise its minimum wage to $13 on Aug. 1, 2021 (with further increases to $14 on July 1, 2022 and $15 on June 1, 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 and there will be new efforts to raise the minimum wage in 2021.
Business for a Fair Minimum Wage is a national network of business owners and executives and business organizations that believe a fair minimum wage makes good business sense. twitter.com/MinimumWageBiz