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Contributed by: Admin 1

Discernible Effects of Local Minimum-Wage Hikes

Contributed by Steve Weiand, SVP Client Relations


How Businesses Including Janitorial Services will absorb the Impact of Increased Wages

The policy to increase minimum wage often receives both, praise and criticism for various reasons. The most understandable support for minimum wage hike comes from its positive impact on the welfare of low-income workers. On the other hand, opponents of the decision have a different standpoint, claiming that businesses reduce their workforce to cope with increased costs and may lead to higher risks of creating unemployment. However, the current period of high inflation in the US economy has significantly impacted the minimum wage increase in 2023.

“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.” – Deirdre Kennedy (Senior Payroll Analyst, Wolters Kluwer US)

Along with its direct impact on workers, raising the minimum wage affects businesses primarily in terms of costs and profits. According to the World Bank Group, minimum wage hike has consequences for businesses when they adopt the main channels available for absorbing the increased labor costs such as reducing their investment in employee training. However, labor-intensive service providers including facilities maintenance and janitorial companies greatly depend on the quality of their workforce and as a result, these businesses undergo a change in their cost and price considerations when there is an increase in the average cost per worker as well as greater cost of layoffs. Additionally, businesses with employees in multiple states can be overwhelming to keep up with numerous minimum wage rate changes.

 “The federal minimum wage stands pat at $7.25 per hour but many states and cities have put their own rates in place.” – CNBC

There are 30 counties and cities increasing their local minimum wage since January 1, 2023. The scheduled increases in different States are as follows:

  • Delaware: $10.50 to $11.75
  • Illinois: $12 to $13
  • Maryland: $12.50 to $13.25
  • Massachusetts: $14.25 to $15
  • Michigan: $9.87 to $10.10
  • Missouri: $11.15 to $12
  • Nebraska: $9 to $10.50
  • New Jersey: $13 to $14.13* (scheduled increase also includes inflation adjustment)
  • New Mexico: $11.50 to $12
  • New York: $13.20 to $14.20 (Upstate New York); $15 (in and around NYC)
  • Rhode Island: $12.25 to $13
  • Virginia: $11 to $12

Cost of living increases of state minimum hourly wages:

  • Alaska: $10.34 to $10.85
  • Arizona: $12.80 to $13.85
  • California: $14.50 (firms with 25 or fewer employees) /$15 (firms with 26+ employees) to $15.50
  • Colorado: $12.56 to $13.65
  • Maine: $12.75 to $13.80
  • Minnesota: $8.42 to $8.63 (small employer); $10.33 to $10.59 (large employer)
  • Montana: $9.20 to $9.95
  • Ohio: $9.30 to $10.10
  • South Dakota: $9.95 to $10.80
  • Vermont: $12.55 to $13.18
  • Washington: $14.49 to $15.74

Later in 2023:

  • Connecticut (effective July 1): $14 to $15
  • Florida (September 2023): $11 to $12
  • Nevada (effective July 1): $9.50 to $10.25 (firms that offer benefits); $10.50 to $11.25 (no benefits offered)
  • Oregon: $13.50 (effective July 1, indexed annual increase to be based on the CPI)


Businesses and customers across the country are gearing up to strive under changing minimum wage rates, while finding a balance between the economic benefits and operational challenges of the decision.