From major cities like Los Angeles to big businesses like McDonald's, 2015 saw momentum for lifting pay above the federal level of $7.25 an hour. Effective Thursday and New Year's Day, 14 states will implement higher minimum wages through legislative action or automatic cost-of-living increases.
Now wage advocates are focused on 2016, as several states and cities including California and New York will consider proposals in the new year to gradually lift pay further to $15 an hour.
"Consumer demand and income levels have not recovered in the wake of the Great Recession and raising the minimum wage is a very effective tool in boosting consumer demand," said Alissa Barron-Menza, vice president of Business for a Fair Minimum Wage.
But other groups contend higher mandated wages ultimately hurt workers and businesses. Forced pay hikes can trigger higher prices for goods and services, and reduced employee benefits to offset wage hikes. "Businesses, whose sales are not increasing at the same pace as wages are increasing, are going to face difficult decisions," said Jack Mozloom, a spokesman for the National Federation of Independent Business.
On Jan. 1, 10 states — Alaska, Arkansas, California, Connecticut, Hawaii, Massachusetts, Michigan, Nebraska, Rhode Island and Vermont — will implement higher wages. Massachusetts and California are the highest at $10 an hour. New Yorkers and West Virginians will usher in the holiday with hourly raises to $9 and $8.75, respectively, effective Thursday.
Two additional states will receive automatic increases based on the cost of living effective Jan. 1. Colorado's minimum hourly pay will go from $8.23 to $8.31, and South Dakota will lift pay from $8.50 to $8.55, according to the National Conference of State Legislatures.
Despite the collective pay raises, only 29 states and Washington, D.C., have wages above the federal floor of $7.25 an hour.