Nearly two dozen states will see minimum wage increases in 2026

When the calendar turns to 2026, workers who earn the minimum wage in more than a dozen states will see a bump in pay, according to a count from the Economic Policy Institute. And by the end of 2026, more states will have a minimum wage of at least $15 an hour than those where workers will continue to receive the federal minimum wage of $7.25 an hour. Some of those minimum wage increases will be big.

“Nebraska by 11%, Missouri by 9%, Florida by 7%,” said Michael Strain at the American Enterprise Institute.

But a lot of them will be modest.

“South Dakota is increasing its minimum wage by around 3%, Ohio by around 3%. These are numbers that are in line with consumer price inflation,” Strain said.

He said the size of the increase informs the impact.

“There are a bunch of ways businesses can absorb a small minimum wage increase without leading to employment reductions, but the larger the increase, the harder it is for businesses to do that,” Strain said.

Next year, he’ll be watching states with big increases to see if there’s a substantial slowdown in hiring.

Michael Reich at the University of California Berkeley said he thinks increases would have to be even bigger to have those kinds of effects.

“We don't know yet at what level that that will happen,” he said.

He has a paper coming up looking into the impacts of minimum wage increases in California and New York, specifically among restaurants. 

“From being at the $7.25, minimum wage, or all the way up to $15 and so employment went up slightly. Turnover did go down,” he said.

And companies did pass on some costs to consumers, as prices went up a bit.

“But some of the costs they bore themselves in lower profits,” he said.

As for the impact on workers, Callie Freitag at the University of Wisconsin, Madison uses Seattle as an example. She said the effects there were modest.

“The sky doesn't fall and people don't become rich,” Freitag said.

She said researchers have asked workers there how they experienced the wage increases.

“Low wage folks were saying ‘the minimum wage is going up, but my groceries are going up, my rents going up. Like I don't necessarily have more left over, right?’ And so, raising the wage is a big political deal, but it’s only one tool we have to help people deal with the rising cost of living,” she said.

Because, Freitag said, as long as costs outpace what people are earning, they’re still going to struggle.