The minimum wage is the lowest hourly rate that an employer can legally pay to a worker. However, lawyers debated that there should be an increase in the minimum wage due to the rising cost of living and inflation. Finally, the government of the US decided to increase the minimum wage. This new year, workers will get extra money to help them financially. The federal minimum wage was $7.25 per hour in 2009 and has not gone under any change since.
Federal Minimum Wage Increase 2025
In the US, most employers must comply with both federal law and state minimum wage laws. Additionally, local governments, including cities and countries, have the authority to establish their own minimum wage rate. Recently, several cities have established ordinances that set a higher minimum wage for employees working within their jurisdictions. In conclusion, if any local entity has adopted a higher minimum wage, employees must be paid a higher minimum wage as compared to other states.
The highest state-level minimum wage in January 2025 of Washington is $16.66 per hour. There are some states like Georgia and Wyoming having minimum wages of $5.15 for both states as compared to the federal minimum wage, which is $7.25. The federal minimum wage law is applicable to these states.
Federal Minimum Wages 2025 Key Highlights
| Particulars | Details |
| Topic Name | Federal Minimum Wage Increase 2025 |
| Program Name | Federal Minimum Wage |
| Country | The United States of America |
| Providing Authority | The Government of USA |
| Applicable in which States | Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, Ohio, Rhode Island, South Dakota, Vermont, Virginia, and Washington. |
| Not Applicable in which States | Alabama, Arkansas, Florida, Georgia, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, North Carolina, North Dakota, New Hampshire, New Mexico, Nevada, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, West Virginia, Wyoming, and the District of Columbia. |
| Official Website | Department of Labour |
Federal Minimum Wage Increase 2025
There is a list of states given below to show you the increased minimum wages in 2025:
| States | Minimun Wages (2025) |
| Alaska | $11.91 |
| Arizona | $14.70 |
| California | $16.50 |
| Colorado | $14.81 |
| Connecticut | $16.35 |
| Delaware | $15.00 |
| Illinois | $15.00 |
| Maine | $14.65 |
| Michigan | $10.56 |
| Minnesota | $11.13 |
| Missouri | $13.75 |
| Montana | $10.55 |
| Nebraska | $13.50 |
| New Jersey | $15.49 |
| New York | $16.50 |
| Ohio | $10.70 |
| Rhode Island | $15.00 |
| South Dakota | $11.50 |
| Vermont | $14.01 |
| Virginia | $12.41 |
| Washington | $16.66 |
Disadvantages of Increasing Minimum Wages 2025
- Increase in Inflation: There is a possibility that with the increase of minimum wages, inflation may also increase as it will enhance consumer spending power. With more spending power, the costs automatically rise due to the unavailability of the products and services. Increased prices generally mean increased cost of living, which may have a negative impact on the economy of the state or country.
- Unemployement: Due to the increase in federal minimum wages, the businesses will have to cut costs to balance the profit ratios. They will have to pay extra to some workers and it can cause job cuts, which will increase unemployment.
- Increase in Competition: The increased minimum wages will attract more workers to work in the labour field. This may cause serious competition between overqualified and underqualified workers. If those labourers who are overqualified and with more experience get the job, the ones with less experience will get frustrated. This also increases the potential chance of them changing their fields to earn money.
Advantages of Increasing Minimum Wages 2025
- Reduction in Anti-Poverty Programs: Higher wages mean reduction in poverty. Poverty is a state of line set by the government to differentiate between the poor and other people. Poverty refers to a state where a person is either earning very little or no income and is unable to fulfil even his basic needs. The government has launched many programs to reduce poverty. This increase may cause a reduction in poverty as well as anti-poverty programs as the workers will get increased maximum wages.
- Pace with Inflation: Increased wages will automatically lead to increased spending power. It will boost consumer spending and this will allow wages to keep pace with inflation. Several governments adjust the minimum wage according to inflation rates. This adjustment is to make sure that the real value of the minimum wage remains relatively stable over time.
FAQs
Q1. Explain the minimum wage in brief.
The minimum wage is the lowest hourly rate that an employer can legally pay to a worker.
Q2. Is the minimum wage the same for both adult and minor labourers?
Yes, the minimum wage is the same for both adult and minor labourers and there is no partiality in the payment even after the increase.
Q3. What should a worker do if their employer is not paying them at least the minimum wage?
The worker has three options:
- File an individual wage claim with the Labour Commissioner’s Wage Claim Adjudication Unit.
- File a report through an alternative dispute resolution such as arbitration.
- File a lawsuit in court.