As is the case every year, the holiday season brings news of states and other localities announcing their minimum wage rates for the coming year. While higher wages in theory sound like a holiday gift, the employment loss they bring with them is less than festive.
View a full list of minimum wage hikes in 2022 here.
As the new year approaches, employers across the country are gearing up for a new set of increases: 83 jurisdictions are raising minimum wages in 2022, including 25 states, 58 cities and counties (including New York and Oregon’s separate county rates), and Puerto Rico, which just enacted a wage hike schedule this year.
See the top 10 state and local minimum wages planned for this year below:
|Top 10 State Minimum Wages in 2022|
|State||Date Effective||Minimum Wage||Tipped Wage|
|California (large employers)||1/1/2022||$15.00||$15.00|
|New York (standard)||12/31/2021||$13.20||$8.80|
|New Jersey (large employers)||1/1/2022||$13.00||$5.13|
|Top 10 Local Minimum Wages in 2022|
|City||Date Effective||Minimum Wage||Tipped Wage|
|West Hollywood, CA (hotel employees)||1/1/2022||$17.64||$17.64|
|Seattle, WA (large employers)||1/1/2022||$17.27||$17.27|
|San Francisco, CA||7/1/2022||$17.16*||$17.16*|
|Mountain View, CA||1/1/2022||$17.10||$17.10|
|Palo Alto, CA||1/1/2022||$16.45||$16.45|
*These minimum wage values represent estimations of the planned 2022 increases based on each local Consumer Price Index and are subject to change.
The list includes additions to last year’s list, including:
- Rhode Island and Delaware, where lawmakers each passed a state minimum wage schedule to increase every year until hitting $15 per hour in 2025.
- West Hollywood, CA which will implement a $17.64 per hour minimum wage for hotel employees on January 1, and raise all employers to at least $17 per hour by 2023.
- Rockland, ME which will raise the minimum wage to $14 per hour on January 1 and to $15 per hour next year.
- Tucson, AZ which will raise its minimum wage to $13 per hour in April, on its way to $15 per hour by 2025.
Among the numerous minimum wage announcements, a few statistics stand out:
- Fifteen states (including Puerto Rico) have enacted set schedules dictating annual minimum wage increases.
- Nine states are positioned to reach a $15 minimum wage over the next several years (California in 2022; Connecticut and Massachusetts in 2023; New Jersey in 2024; Delaware, Illinois, Maryland, and Rhode Island by 2025; and Florida by 2026).
- Seventy-five of these jurisdictions are also raising their tipped minimum wages, or the hourly rates required for employees who earn regular tip income. Out of these 75, seven states do not allow a tip credit (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington), which dictate local restrictions against tip credits as well.
One of the biggest headlines surrounding wage hikes in the new year has been the size of increases in jurisdictions that adjust their wage rates according to inflation. Due to record inflation this year, many states have had larger-than-expected increases to their minimum wage rates. For example, Maine announced its wage will rise from $12.15 to $12.75 in the New Year (a 300% larger increase than last year), and Ohio’s will rise from $8.80 to $9.30 (400% larger increase than last year).
Fifty-six states, counties, and cities are indexing their minimum wage rates according to inflation this year, at an average increase of roughly 4.5%.
The historical track record of steep minimum wage mandates is clear: they cause job loss and business closure. As employers and employees alike weather ongoing supply chain problems, rising inflation, and lingering government COVID-19 restrictions, this wave of minimum wage increases presents yet another challenge to keeping workers employed and business doors open.