New year, new minimum wage

Woman In Face Mask Holding Paycheck Or Stimulus Check
Andrey_Popov / Shutterstock

But the other 29 states have decided $7.25 an hour doesn't cut it and have raised the minimum wage on their own.

A number of them adjust their minimums each year to keep up with inflation, while others have been raising the rate by $1 or more in regular steps toward reaching a goal — often $15-an-hour, which became a popular objective after workers at New York City fast-food restaurants went on strike for better pay in 2012.

These are the states that have raised the minimum wage for 2021:

New Year's minimum wage increases
State 2020 rate 2019 rate
Alaska $10.34 $10.19
Arizona $12.15 $12.00
Arkansas $11.00 $10.00
California $14.00* $13.00
Colorado $12.32 $12.00
Florida $8.65 $8.56
Illinois $11.00 $10.00
Maine $12.15 $12.00
Maryland $11.75 $11.00
Massachusetts $13.50 $12.75
Minnesota $10.08* $10.00
Missouri $10.30 $9.45
Montana $8.75 $8.65
New Jersey $12.00* $11.00
New Mexico $10.50 $9.00
New York $12.50 $11.80
Ohio $8.80* $8.70
South Dakota $9.45 $9.30
Vermont $11.75 $10.96
Washington $13.69 $13.50
*At larger employers. Smaller employers have a lower rate.

Other places where minimums are rising

Las Vegas, Nevada, USA at the Welcome to Las Vegas Sign at dusk.
Sean Pavone / Shutterstock

Three other states — Connecticut, Nevada and Oregon — will hike their minimum wages later in the year.

Michigan was scheduled to be among the states raising the minimum wage at the start of the new year — but it didn't happen after all. A 2018 law does not allow the state's minimum wage to rise after a year of high unemployment, above 8.5%. Through October, Michigan's average jobless rate for 2020 was over 10%.

Meanwhile, some areas have hiked the minimum wage locally for 2021. Some of the highest new pay rates at the local level include $16.84 in the San Francisco suburb of Emeryville and $16.69 in Seattle. By next summer, New York City and the Portland, Oregon, metro area also will see increases, to $15 and $14, respectively.

But let's be realistic: $15 still isn't a lot of money in a city like New York, where typical rents in Brooklyn and Queens run into thousands of dollars.

How to stretch your money when you're making very little

Dollar.
Billion Photos / Shutterstock

When your income is low — especially in a high-price area — you need to use every trick you can find to make your money go as far as it can. Try these strategies if what you make is in the neighborhood of the minimum wage:

Earn cash back. When you shop for groceries, use an app that puts cash back in your pocket if you just snap a photo of your receipt.

Pay less when you shop online. Download a free browser add-on that will automatically point you in the direction of coupons and better prices every time you shop online.

Slash your car insurance premiums. Studies have found that people who don't shop around for their car insurance each time it comes up for renewal can wind up overpaying by more than $1,100 a year. So, every six months, use a website that'll help you compare insurance rates to be certain you're getting the best deal.

Don't "go naked" on health insurance. Going without health insurance to save money is a terrible idea, because if you become seriously ill or injured you'll find yourself saddled with massive medical debt. Find a cheap health insurance policy by using a service to compare rates from multiple insurers.

About the Author

Ethan Rotberg

Ethan Rotberg

Reporter

Ethan Rotberg is a staff reporter at MoneyWise. His background includes nearly 15 years as a writer, editor, designer and communications professional. He loves storytelling, from feature writing to narrative podcasts. His work has appeared in the Toronto Star, CPA Canada and Metro, among others.

You May Also Like

Capital One Shopping vs. Honey — Which One Saves You More?

These similar-looking services provided totally different results in our test run.

Do Big Stores Save You the Most? We Price-Check Our Shopping List

With one 30-second trick, we found $460 in savings beyond Walmart and Amazon.

Take a Break From Your Debt This Month

Let debt consolidation give you a break.