New Year minimum wage hikes will boost consumer spending, strengthen economy

By TIM ROWDEN
Editor-in-Chief

More than 20 states, including Missouri and Illinois, will be raising their minimum wages to ring in the new year, according to a report from Business for a Fair Minimum Wage. Another four states and the District of Columbia have increases scheduled later in 2023.

Business owners across the country are welcoming the increases, saying they will boost consumer spending, strengthen local economies and improve employee hiring, retention, productivity and customer service.

The federal minimum wage has been stuck at $7.25 an hour since July 24, 2009 — the longest period in history without a raise.

Locally, Illinois is increasing its minimum wage to $13 on Jan. 1, 2023, with future increases to $14 in 2024 and $15 in 2025. Missouri will increase its minimum wage to $12 on Jan. 1, 2023, then index it for the cost-of-living.

MOVE THE FLOOR UP, IMPROVE THE ECONOMY
Mike Draper, owner of Raygun clothing and design, with locations in Kansas City, Mo., Chicago, Des Moines, Cedar Rapids, Iowa City, and Omaha, says the biggest threat the economy faces is the stagnation of spending and wealth disparity. One way to begin fixing that, he says, is to raise the minimum wage.

Raygun sells graphic T-shirts and other items online.

“If there’s a billion dollars spread among a thousand people, it’s going to have much more of an impact than a billion dollars spread among 10 people,” Draper said. “There’s only so many T-shirts a billionaire can wear.”

Raising the minimum wage is the simplest way to begin addressing that disparity, Draper says.

“It’s a factor of moving the floor up. The minimum wage has been stagnant for more than a decade.

“I don’t think raising the minimum wage is the be all and end all,” Draper said,” but it’s the one thing we really need to address to move the floor up. Increasing spending directly to people is a one to two. It should dramatically improve the lives of those people and the local economy.”

OTHER INCREASES
In November, Nebraska voters passed Initiative 433, which will gradually raise the state minimum wage to $15 by 2026. A coalition of more than 300 Nebraska businesses supported the increase. The first step of the raise will take place on Jan. 1, 2023, when Nebraska’s minimum wage increases from $9 to $10.50.

The highest statewide minimum wages in effect as of Jan. 1, 2023 will be Massachusetts at $15, California at $15.50, and Washington State at $15.74. The District of Columbia minimum wage, which increases annually on July 1, is currently $16.10.

In addition, numerous city and county minimum wages will increase in 2023. The UC Berkeley Labor Center provides a regularly updated Inventory of U.S. City and County Minimum Wage Ordinances at https://laborcenter.berkeley.edu/inventory-of-us-city-and-county-minimum-wage-ordinances/.

(Information from Business for a Fair Minimum Wage.)