Quick summary:The clocks striking 2025 didn’t only mark the new year — many states also increased their minimum wages on 1/1. Today, we’re exploring the impact of these statewide adjustments, the federal level being unchanged since 2009, and the rising cost of living, featuring reporting from AsAmNews, Sahan Journal, India Currents, Documented, and Black Voice News.

Hey, y’all,

Things have gotten a lot more expensive since 2009, right? That might even be an understatement, with certain cups of coffee running upwards of $7 nowadays.

What’s even crazier is that minimum wages have not budged since 2009 — at least at the federal level. Since then, a federal minimum wage worker has made just $7.25 per hour. 

That means they would just barely be able to afford that cup of coffee after an hour of work, let alone keep up with the larger costs of living that are also on the rise. 

Advocates have long campaigned for federal wage increases to at least keep pace with inflation, and Congress has made some efforts. 

For example, the Raise the Wage Act would steadily increase the level to $17 by 2028, as well as get rid of the “subminimum wage” system that forces workers to rely heavily on tips. The bill was first introduced by the Congressional Asian Pacific American Caucus, and received strong support from Asian American and Pacific Islander restaurant workers and owners. It passed the House of Representatives, yet has since stalled in the Senate, according to AsAmNews.

On the other hand, statewide increases to the minimum wage have had more success. While five do not have a state wage and default to the federal level, the majority of states have set a higher minimum wage than $7.25. 

Plus, on January 1, workers in 21 states got a bump up in pay, according to Business for a Fair Minimum Wage, a national network of business owners who believe in fair pay. 

Annual increases took effect in Alaska, Arizona, California, Colorado, Connecticut, Maine, Minnesota, Montana, New Jersey, Ohio, South Dakota, Vermont, Virginia, and Washington state. 

Several other states received a scheduled increase separate from annual indexing. For example, voters in Alaska and Missouri approved 2024 ballot measures to increase state wages. Delaware, Illinois, Michigan, Nebraska, New York, and Rhode Island also enacted pay raises.

“Alaska’s minimum wage increases will help Alaskans thrive,” said Derrick Green, owner of Waffles and Whatnot in Anchorage and treasurer of the Alaska Black Chamber of Commerce, according to Business for a Fair Minimum Wage. “The more that people can make a living in Alaska, the stronger our businesses and communities will be.”

However, not every state campaign finds success, such as in California, where voters rejected a measure to increase the state minimum wage by a higher margin to $18, India Currents reports. 

Other avenues for increasing pay exist within individual industries and cities. For example, nursing home workers in Minnesota have won higher wages and better overtime pay for holidays, Sahan Journal reports. 

New York City passed a groundbreaking $17.96 minimum wage law for food delivery and rideshare drivers — although there has been backlash towards companies like DoorDash and Uber Eats for not complying, Documented explains.

Meanwhile, fast food workers in California have won a $20 minimum wage, according to Black Voice News.

Truth be told, the impact of increasing wages is debated by economists. Some studies suggest it can hurt employment and drive up prices, while others affirm more money in workers’ pockets means stronger consumer spending and a lower burden on social services, Black Voice News explains.

Either way, there is clearly something about the current system — where the default federal pay is still in the single digits — that is broken. As the costs of being alive climb higher and higher, people with lower incomes get hurt the most, more of the middle class experience poverty, and of course, the rich get richer. 

Nudging the minimum amount workers can earn forward each year, then, is perhaps the minimum that should be done to address the widening wealth gap. 

Do you have questions or comments about today’s newsletter? Send them to newsletters@url-media.com.

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