Higher minimum wage rates take effect throughout the US as inflation bites into earnings

The minimum wage is set to go up in two states and Washington, DC, on July 1. Higher minimum wage rates will also take effect in more than 20 localities throughout the US.

A host of minimum wage raises already took effect on Jan. 1, affecting 19 states and nearly 50 cities and counties.

Here’s what employers should know about mid-year changes taking effect.

Alaska, Oregon, DC raise the minimum wage. Workers in Alaska will be entitled to earn $14 an hour, up from to $13, starting July 1.

Oregon’s standard minimum wage will increase from $15.05 to $15.55 an hour, while employers in the Portland metro area will be required to pay employees at least $16.30, and those in non-urban areas must pay a minimum wage rate of $14.05.

And in DC, the minimum wage will increase to $18.40, up from $17.95 per hour.

Florida’s minimum wage will increase from $14 to $15 later in the year, on Sept. 30.

Chicago, Los Angeles, San Francisco, and Montgomery, County, MDd., are among the localities affected by July 1 minimum wage changes.

A few industry-specific minimum wage raises will also take effect, affecting healthcare workers throughout California, as well as hotel workers in Los Angeles and surrounding areas.

This is the first year that more workers are eligible to earn at least $15 an hour than those living in jurisdictions with the federal minimum wage rate of $7.25 an hour, HR Brew reported in January.

Inflation is outpacing wages. Due to higher prices for items such as gasoline, these wage gains won’t go as far as workers may have initially anticipated.

Inflation has outpaced wage growth for the last two months, Bloomberg reported on June 23, largely due to the US-Israeli war with Iran. Across sectors including retail, finance, and healthcare, workers’ wages are falling when accounting for inflation.

Such trends suggest employees may stay in their current jobs, given the premium for switching is less attractive, Nicole Bachaud, a labor economist with ZipRecruiter, told HR Brew in March. That’s not necessarily a good sign for the labor market, though.

“There’s less of a pay premium for switching, which is keeping more people locked into place, keeping turnover low, and creating this perpetual cycle of stalled activity across the labor market,” she said.