18 U.S. States to Raise Minimum Wage in 2026 Amid Soaring Living Costs
From California to Hawaii, new wage increases highlight the growing divide between state-level pay standards and the stagnant federal minimum of $7.25 an hour.
The United States is set to see a new wave of minimum wage increases beginning in early 2026, as 18 states have approved pay hikes that reflect widening disparities between state-level living costs and the federal minimum wage, which has remained unchanged at $7.25 per hour since 2009.
According to the U.S. Bureau of Labor Statistics, the purchasing power of $7.25 in 2009 is now equivalent to roughly $11.12 in 2025, underscoring how inflation has eroded real wages amid rising costs for housing, food, and healthcare. Economists say these state-level increases serve as a lifeline for millions of low-income workers struggling to keep up with the escalating cost of living.
Eighteen U.S. States to Implement Minimum Wage Increases Starting January 2026
At least 18 U.S. states are set to raise their minimum wages in 2026, with most changes taking effect on January 1. Among the most notable increases:
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Arizona: from $14.70 to $15.15 per hour
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California: from $16.50 to $16.90 per hour
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Colorado: from $14.81 to $15.16 per hour
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Hawaii: a significant $2 jump, reaching $16.00 per hour
Other states, including Maine, Michigan, New Jersey, New York, and Washington, will also implement increases. Washington will remain among the nation’s highest-paying states, with its rate rising from $16.66 to $17.13 per hour. Meanwhile, Minnesota will record one of the smallest adjustments — just $0.28 per hour, equating to about $11 more per week or $45 per month for full-time workers.
Five States Still Lack Minimum Wage Laws as 2026 Increases Highlight Growing Economic Divide
In contrast, five states — Alabama, Louisiana, Mississippi, South Carolina, and Tennessee — still lack their own minimum wage laws, leaving workers bound by the federal rate of $7.25. Analysts say this growing gap highlights a deepening economic divide between high-cost, fast-growing regions and states that still rely on outdated wage floors.
The wage increases don’t apply to all workers. Certain groups — such as salaried executives, independent contractors, agricultural, and seasonal workers — remain exempt. However, most employees are entitled to whichever rate is higher between local and federal laws.
Federal Efforts to Raise Minimum Wage Face Gridlock Amid State-Level Increases
At the federal level, progress on raising the minimum wage remains stalled. Earlier this year, Republican Senator Josh Hawley of Missouri and Democratic Senator Peter Welch of Vermont introduced a bipartisan proposal to raise the federal minimum to $15 an hour, more than double its current level. Yet deep partisan divisions and disagreements over the potential economic effects make near-term passage uncertain.
While economists continue to debate how these increases will affect the broader labor market, one thing is clear: millions of Americans will see immediate improvements in their paychecks starting in January 2026, in what is shaping up to be one of the largest minimum wage expansions in modern U.S. history.
