Low-wage workers saw the biggest wage growth in states that increased their minimum wage between 2018 and 2019

Twenty-three states and the District of Columbia raised their minimum wage in 2019 through legislation, referendum, or because the minimum wage was indexed to inflation in those states. Low-wage workers in these states saw much faster wage growth than low-wage workers in states that did not increase their minimum wage between 2018 and 2019, as shown in EPI’s latest State of Working America Wages report. This blog post dives a bit deeper by dispelling some tempting explanations for what might be happening, such as stronger across-the-board wage growth in those states (didn’t happen) or employment losses (not borne out in the data).

Figure A shows in green the states with minimum wage increases that occurred through legislation or referendum in 2019, while states in blue had automatic increases resulting from indexing the minimum wage to inflation. Workers in states that increased their minimum wage between 2018 and 2019 account for about 55% of the U.S. workforce. The nominal minimum wage increases ranged from $0.05 (0.5%) in Alaska to $1.00 (9.1%−10.0%) in California, Massachusetts, and Maine.

Figure A

The minimum wage increased in 23 states and the District of Columbia in 2019: States with minimum wage increases in 2019, by type of increase

State Abbreviation Category
Alaska AK Indexed
Alabama AL No change
Arkansas AR Legislated or ballot measure
Arizona AZ Legislated or ballot measure
California CA Legislated or ballot measure
Colorado CO Legislated or ballot measure
Connecticut CT Legislated or ballot measure
District of Columbia DC Legislated or ballot measure
Delaware DE Legislated or ballot measure
Florida FL Indexed
Georgia GA No change
Hawaii HI No change
Iowa IA No change
Idaho ID No change
Illinois IL No change
Indiana IN No change
Kansas KS No change
Kentucky KY No change
Louisiana LA No change
Massachusetts MA Legislated or ballot measure
Maryland MD Legislated or ballot measure
Maine ME Legislated or ballot measure
Michigan MI Legislated or ballot measure
Minnesota MN Indexed
Missouri MO Legislated or ballot measure
Mississippi MS No change
Montana MT Indexed
North Carolina NC No change
North Dakota ND No change
Nebraska NE No change
New Hampshire NH No change
New Jersey NJ Legislated or ballot measure
New Mexico NM No change
Nevada NV No change
New York NY Legislated or ballot measure
Ohio OH Indexed
Oklahoma OK No change
Oregon OR Legislated or ballot measure
Pennsylvania PA No change
Rhode Island RI Legislated or ballot measure
South Carolina SC No change
South Dakota SD Indexed
Tennessee TN No change
Texas TX No change
Utah UT No change
Virginia VA No change
Vermont VT Indexed
Washington WA Legislated or ballot measure
Wisconsin WI No change
West Virginia WV No change
Wyoming WY No change
ChartData Download data

The data below can be saved or copied directly into Excel.

Notes: Minimum wage increases passed through either legislation or ballot measure took effect on January 1, 2019, in Arkansas, Arizona, California, Colorado, Delaware, Maine, Massachusetts, Michigan, Missouri, New York, Rhode Island, and Washington. Alaska, Florida, Minnesota, Montana, New Jersey, Ohio, South Dakota, and Vermont increased their minimum wages in 2019 because of indexing to inflation. New Jersey, Oregon, and Washington, D.C., legislated minimum wage increases that took effect on July 1, 2019. Note that Connecticut legislated a minimum wage increase that took effect on October 1, 2019. This sample considers all changes after January 2018 and before December 2019; therefore, Maryland is included even though the legislated minimum wage increase for Maryland took effect on July 1, 2018. Note that after indexing to inflation on January 1, 2019, New Jersey legislated a minimum wage increase on July 1, 2019; therefore, New Jersey appears twice in these lists.

Source: EPI analysis of state minimum wage laws. See EPI’s minimum wage tracker for the most current state-level minimum wage information.

Copy the code below to embed this chart on your website.

Figure B compares 10th-percentile wage growth in states with minimum wage increases compared with those without increases. Growth at the 10th percentile in states without minimum wage increases was much slower (0.9%) than in states with any kind of minimum wage increase (4.1%). This result holds true for both men and women. The 10th-percentile men’s wage grew 3.6% in states with minimum wage increases, compared with 0.7% growth in states without any minimum wage increases, while women’s 10th-percentile wages grew 2.8% in states with minimum wage increases and 1.4% in states without.

Figure B

Wage growth at the bottom was strongest in states with minimum wage increases in 2019: 10th-percentile wage growth, by presence of 2019 state minimum wage increase and by gender, 2018–2019

States with minimum wage increases States without minimum wage increases
Overall 4.1% 0.9%
Men 3.6% 0.7%
Women 2.8% 1.4%
ChartData Download data

The data below can be saved or copied directly into Excel.

Notes: Minimum wage increases passed through either legislation or ballot measure took effect on January 1, 2019, in Arkansas, Arizona, California, Colorado, Delaware, Maine, Massachusetts, Michigan, Missouri, New York, Rhode Island, and Washington. Alaska, Florida, Minnesota, Montana, New Jersey, Ohio, South Dakota, and Vermont increased their minimum wages in 2019 because of indexing to inflation. New Jersey, Oregon, and Washington, D.C., legislated minimum wage increases that took effect on July 1, 2019. Note that Connecticut legislated a minimum wage increase that took effect on October 1, 2019. This sample considers all changes after January 2018 and before December 2019; therefore, Maryland is included even though the legislated minimum wage increase for Maryland took effect on July 1, 2018. Note that after indexing to inflation on January 1, 2019, New Jersey legislated a minimum wage increase on July 1, 2019; therefore, New Jersey appears twice in these lists.

Sources: Author’s analysis of EPI Current Population Survey Extracts, Version 1.0 (2020), https://microdata.epi.org, and EPI analysis of state minimum wage laws. See EPI’s minimum wage tracker for the most current state-level minimum wage information.

Copy the code below to embed this chart on your website.

Strong wage growth at the 10th percentile is not simply due to stronger overall wage growth in those states. The question is whether 10th-percentile wages in those states would have risen with or without the minimum wage increases. Figure C illustrates wage growth separately for states with and without minimum wage increases between 2018 and 2019 at the 10th, 50th, and 80th percentiles of the wage distribution. Between 2018 and 2019, the median and 80th percentile wage in states with minimum wage changes increased 0.7% and 1.5%, respectively, while they increased 2.1% and 2.4%, respectively, in non-changing states. This belies any claims that strong wage growth at the 10th percentile is simply due to stronger overall wage growth in those states and that 10th-percentile wages in those states would have risen with or without the minimum wage increases.

Figure C

States with minimum wage increases had stronger growth at the bottom, but not across the board : Wage growth by presence of 2019 state minimum wage increases at the 10th, 50th, and 80th percentiles 2018–2019

Percentile States with minimum wage increases States without minimum wage increases
10th 4.1% 0.9%
50th 0.7% 2.1%
80th 1.5% 2.4%
ChartData Download data

The data below can be saved or copied directly into Excel.

Sources: Author’s analysis of EPI Current Population Survey Extracts, Version 1.0 (2020), https://microdata.epi.org, and EPI analysis of state minimum wage laws. See EPI’s minimum wage tracker for the most current state-level minimum wage information.

Copy the code below to embed this chart on your website.

What about changing economic conditions? Is there any evidence of job losses in states that increased the minimum wage that could shift employment away from minimum wage jobs? Figure D compares changes in unemployment rates and the share of the population with a job—the employment-to-population ratio—between 2018 and 2019 in states that increased their minimum wage versus states that didn’t. What’s important to note is that the unemployment rate fell in both sets of states between 2018 and 2019. It fell slightly more in minimum-wage-raising states (−0.3 percentage points) than in states that didn’t increase their minimum wage (−0.2 percentage points). Similar results are found for changes in the employment-to-population ratio. Improving labor market conditions occurred in both sets of states, but there was slightly faster growth (+0.4 percentage points) in states with increases than in states without (+0.3 percentage points). While this is far from a comprehensive analysis, there doesn’t appear to be any negative economic effect from raising the minimum wage.

Figure D

States with and without minimum wage increases had similarly improving labor market conditions between 2018 and 2019: Changes in the unemployment rate and employment-to-population ratio, by presence of 2019 state minimum wage increases, 2018–2019

States with minimum wage increases States without minimum wage increases
Unemployment rate -0.251 -0.18
Employment-to-population ratio 0.43 0.31
ChartData Download data

The data below can be saved or copied directly into Excel.

Source: Economic Policy Institute analysis of Current Population Survey microdata from the U.S. Census Bureau

Copy the code below to embed this chart on your website.

It’s important to note that not only are wage increases for low-wage workers larger in minimum-wage-raising states, but their pay is significantly higher. The employment-weighted average 10th percentile wage in states that raised the minimum wage was $10.98 in 2019. In states that didn’t increase their minimum wage in 2019, the 10th percentile was $9.80. For a full-time worker, this difference totals about $2,500 over a year.

State-level increases are an improvement, but stronger minimum wage policy is needed, particularly for workers in states that continue to rely on the federal minimum wage of $7.25 per hour, which hasn’t budged in over 10 years. Furthermore, raising the federal minimum wage to $15 by 2025 would disproportionately raise pay for women. Although men make up a slightly larger share of the overall U.S. workforce, the majority of workers who would be affected by a raise to the federal minimum wage (58.3%) are women. Raising the federal minimum wage would also disproportionately benefit black workers because they are overrepresented among low-wage workers and are less likely to live in states or localities that have passed a minimum wage that is higher than the current federal minimum wage. As a result, increasing the minimum wage to $15 would mean a pay increase for 38.1% of all black workers. The U.S. House of Representatives passed this minimum wage increase in 2019, but so far the Senate has failed to act.

In sum, minimum wage policy matters for millions of low-wage workers. Low-end wage growth was stronger in states that increased the minimum wage than in states that didn’t. Further, increasing the federal minimum wage has the potential to lift wages for millions more workers.