As state legislatures start off the new year, lawmakers have been quick to jump on new minimum wage hike proposals, including bills that would eliminate state tip credits.
The research on potential impacts of these bills is clear: they employees by reducing employment opportunities, limiting earnings, and forcing businesses to close.
According to analysis by economists from Miami and Trinity Universities using nonpartisan Congressional Budget Office methodology, these state proposals could cost nearly 212,000 jobs combined and $287.5 million in lost employee earnings.
Read more on the bills introduced already this year, and how they could impact employees in each state.
- Massachusetts’ “Minimum Wage for Tipped Employees Initiative” would eliminate the Bay State’s tip credit and raise the tipped wage more than 120% up to $15 per hour by 2029. The ballot measure received enough signatures to go to the state legislature for adoption. If lawmakers do not adopt the measure, organizers will have the opportunity to raise additional signatures to send it to the ballot.
- Who is impacted: Tipped employees
- How many jobs would be lost: 8,155
- How many earnings would be lost: $29.7 million
- Michigan’s “$15 Minimum Wage Initiative” would increase the state minimum wage up to $15 per hour by 2027 and eliminate the state’s tip credit and cash wage for tipped workers. The measure has gathered enough signatures to go on the ballot this year but was not approved by a majority of the state’s Board of Canvassers, and a district court will determine if this measure goes to voters in November.
- Who is impacted: Regular minimum wage and tipped employees
- How many jobs would be lost: 43,568
- How many earnings would be lost: $48.2 million
- Maryland’s Senate Bill 160 would eliminate the state’s tip credit and raise the minimum wage to $15 by 2027. An identical bill was proposed last year and stalled in the Senate Finance Committee after hearing concerns from dozens of local tipped employees.
- Who is impacted: Tipped employees
- How many jobs would be lost: 7,179
- How many earnings would be lost: $44 million
- Virginia’s House Bill 1/Senate Bill 1: A pair of bills (HB 1/SB 1) seek to approve two final increases to the state’s regular minimum wage up to $15 per hour by 2026. (HB335 previously sought to eliminate the state’s tip credit by 2028, but was since amended to set up a study of the impact of doing so in the Commonwealth).
- Who is impacted: Minimum wage employees
- How many jobs would be lost: 12,127
- New Hampshire’s SB 308 would establish a $15 minimum wage by 2025. This would also affect tipped employees, as it would maintain a tip credit amount of 45% of the regular minimum wage rate.
- Who is impacted: Regular minimum wage and tipped employees
- How many jobs would be lost: 6,885
- How many earnings would be lost: $17.1 million
- Pennsylvania’s HB 1500 would establish a $15 minimum wage, more than doubling the state’s current $7.25 per hour rate. The bill would also raise the tipped wage from $2.83 per hour up to $9 per hour.
- Who is impacted: Regular minimum wage and tipped employees
- How many jobs would be lost: 85,771
- How many earnings would be lost: $109.3 million
- Illinois’ new bill would raise the current tipped minimum wage of $8.40 per hour up to $15 per hour by 2025.
- Who is impacted: Tipped employees
- How many jobs would be lost: 7,730
- How many earnings would be lost: $20.8 million
- Wisconsin’s new bill would raise the current minimum wage of $7.25 per hour up to $10.85 per hour upon enactment, and up to $15 per hour a year later. It would also eliminate the state’s tip credit.
- Who is impacted: Regular minimum wage and tipped employees
- How many jobs would be lost: 31,836
- How many earnings would be lost: $58.6 million
- Iowa’s HF 2293 would raise the current minimum wage of $7.25 per hour up to $15 per hour by 2026.
- Who is impacted: Regular minimum wage employees
- How many jobs would be lost: 8,389
- How many earnings would be lost: $13.8 million