These 20 States Increased Their Minimum Wages On Jan. 1

As the U.S. welcomes the new year, millions of workers in several states will see their minimum wage increase.

Beginning Jan. 1, 20 states and Washington, D.C., will implement minimum wage increases ranging from 23 cents to $1.50 per hour, according to the Economic Policy Institute.

These states are Arizona, California, Colorado, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New Mexico, Ohio, Rhode Island, South Dakota, Vermont and Washington.

At least 8 million workers will benefit from the increases this year, CNBC reported.

At $15.74, the state of Washington will provide the highest minimum wage to workers among all the states.

California comes second at $15.50, up from $14 for businesses with less than 25 employees and $15 for businesses with more than 26 employees, CNN reported.

Washington, D.C., still has the highest minimum wage nationwide after increasing the hourly pay to $16.50. This will be followed by another 50-cent hike on July 1. See the complete list of increases here.

Deirdre Kennedy, a senior payroll analyst at Wolters Kluwer, told CNBC that last year's inflation played a big part in minimum wage increases in several states.

"There's quite a few states across the country that will be seeing quite big jumps in the minimum wage because of the higher rate of inflation this past year," Kennedy said.

D.C. and 13 other states peg their minimum wages to the Consumer Price Index (CPI), which measures the average change consumers pay for certain goods and services.

The federal minimum wage hasn't changed since 2009, at $7.25 per hour.

In September, a report by the Urban Institute showed that increasing the nationwide minimum wage to $15 would help 56 million workers.

Kevin Werner, a research associate at the Urban Institute's Income and Benefits Policy Center, said raising the minimum wage would lead to a decline in poverty and help workers in general.

Holly Sklar, the chief executive officer of Business for a Fair Minimum Wage, echoed Werner's remark, saying that increasing the hourly pay would also increase consumer demand and help local economies thrive.

In 2021, Democrats in Congress pushed increasing the federal hourly pay to $15 as part of the American Rescue Plan, but it failed to pass in the Senate.

The following year, President Joe Biden signed an executive order raising the minimum wage of federal workers and contractors to $15.

Large private companies such as Costco, Target, Amazon and Walmart have also implemented an increase in hourly pay to at least $15 per hour.