Yahoo Finance How Much Minimum Wage Will Go Up Every Year Through 2028
The beginning of 2024 brought good news to certain minimum wage workers, as 22 states and 38 cities and counties raised their own minimums above the federal minimum. As CBS News reported, the pay raises impacted nearly 20 million workers and led to about $7 billion in additional wages. Some of those wage hikes will continue through 2028, but most of the country won’t see the minimum go up.
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The federal minimum wage of $7.25 an hour has not changed since 2009 and isn’t likely to change again anytime soon. However, a dozen states automatically hike the wage each year to account for inflation, the Economic Policy Institute reported.
According to the National Conference of State Legislatures (NCSL), 34 states, territories, and districts have minimum wages above the federal minimum of $7.25 an hour. Five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. Two states — Georgia and Wyoming — have a minimum wage below $7.25 an hour, although they must all adhere to the federal minimum.
The state with the highest minimum wage is Washington at $16.28 an hour, according to data from Paycom. California is next highest at $16 an hour, followed by Connecticut ($15.69), Maryland ($15), Massachusetts ($15) and Colorado ($14.42). The minimum wage in Washington, D.C., rose to $17.50 an hour on July 1, 2024, The (Colorado Springs) Gazette reported.
Predicting how much the minimum wage will increase is nearly impossible because so many factors are involved. It’s a little easier at the state level — at least for those states that automatically tie wage hikes to inflation and other criteria.
For example, according to the NCSL, the Connecticut minimum wage rate automatically increases to one-half of 1% above the federal minimum wage, if the federal minimum wage goes above the state minimum wage. Similarly, the Massachusetts minimum wage rate automatically increases to 10 cents above the federal minimum wage, if the federal minimum wage goes above the state minimum wage.
At the federal level, the minimum wage does not go up automatically and has not increased at all in more than 15 years. According to the U.S. Department of Labor, Congress must pass a bill that the president signs into law in order for the federal minimum wage to go up. Given the divisions in the nation’s capital these days, it might be a long time before the minimum goes up again.
That doesn’t mean certain lawmakers and federal agencies haven’t looked into raising the minimum and analyzing the potential impact. The Congressional Budget Office (CBO) published an interactive tool that lets users explore the effects of policies that would increase the federal minimum wage. The tool’s default policy option is based on the Raise the Wage Act of 2023 (S. 2488), which CBO analyzed in The Budgetary and Economic Effects of S. 2488, the Raise the Wage Act of 2023.
Under the default option, the minimum wage first increases incrementally in July 2024. Five years later, in July 2029, it reaches its target of $17 an hour. After that, it’s indexed to the median hourly wage.
Under the default option, here is how the federal minimum wage would rise every year through 2028 (estimates based on the CBO’s bar graph).
Hint: it won’t get to a living wage.
2024
By the end of 2024, the minimum wage would be $9.25.
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2025
By the end of 2025, the minimum wage would be $11.00.
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2026
By the end of 2026, the minimum wage would be $12.50.
2027
By the end of 2027, the minimum wage would be $13.75.
2028
By the end of 2028, the minimum wage would be $15.50.
Keep in mind that the above wages are only estimates included in the CBO’s modeling. It’s a near-certain bet that none of those minimums will be approved at the federal level. Your best bet on getting a regular increase in the minimum wage is to move to a state or city that automatically adjusts the minimum for inflation.
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