January 1 Minimum Wage Hike Gives Rhode Island Workers A Raise

As the new year rolls in on January 1, so will a higher minimum wage for residents of Rhode Island, according to the Rhode Island Department of Labor and Training.

In 2023, there will be a minimum wage bump from $12.25 per hour to $13 per hour, the department said.

Rhode Island workers affected by the increases will see an average increase in their annual earnings of about $552, with an average change in their hourly wage of $0.39, according to a report by the Economic Policy Institute.

That’s 9.9 percent of Rhode Island’s total workforce of 433,200. An estimated 24,400 children live in households affected by the wage hikes. They represent 11.8 percent of the children living in Rhode Island.

The increase comes in accordance with state legislation that will result in a minimum wage increase of one dollar annually before it reaches $15 in 2025, according to the National Conference of State Legislatures.

Is There A Minimum Wage For Everyone?

There are exceptions to the new minimum wage, including for full-time students under the age of 19 working in nonprofit organizations, 14 and 15-year-olds who do not work more than 24 hours a week, and certain domestic service employees, according to the Rhode Island Department of Labor and Training.

The federal minimum wage remains at $7.25 for non-tipped hourly workers, and the tipped-wage minimum is $2.13 per hour.

How Do Minimum Wages Look In Other States?

Currently, 30 states and Washington D.C. have minimum wages above the federal minimum, and as of July 1, Rhode Island's minimum wage of $12.25 an hour was the 12th highest among states., according to the National Conference of State Legislatures.

The minimum wage will rise in 23 states and Washington, D.C. on New Year’s Day, according to the Economic Policy Institute report. Wages will increase by about $5 billion with the wage hikes, with annual earning increases of about $150 in Michigan to $937 in Delaware, the report says.

When the changes take effect, the state with the highest minimum wage will be Washington, with a starting hourly rate of $15.74.

Additionally, 27 cities and counties, primarily in California, will increase their minimum wages on January 1, which the Economic Policy Institute said will further increase the number of workers who are likely to see bigger paychecks in 2023.

What Is Causing The Wage Increases?

In some cases, wage increases were prompted by inflation-linked adjustments. In others, they were automatically triggered by state law or by legislative action. In Washington, D.C., the tipped wage goes up by 65 cents due to a successful midterm election ballot measure calling for the elimination of the tipped wage by 2027.

Who Will Be Most Impacted By Wage Increases?

The Economic Policy Institute said that because of long-standing discrimination and occupational segregation, the most concentrated effects are seen among:

• Hispanic or Latino workers, 21.8 percent (20.1 percent of the workforce);
• Black workers, 12.2 percent (9.5 percent of the workforce);
• Multiracial and Native American workers, 14.4 percent (2 percent of the workforce).

The minimum wage increases will “have a meaningful impact on workers struggling to make ends meet,” the think tank said in its release, noting that 23.2 percent of affected workers have incomes below the poverty line, and another 26.5 percent have incomes below twice the poverty line.

Other highlights from the report:

• About 55 percent of affected workers are those 25 and older, and nearly half (45 percent) work full time. Most of the affected workers have a high school diploma or less education, but about 41 percent have at least some college.
• More than 2 million parents will get a raise, including more than 1 million single parents. It’s estimated more than 5.7 million children live in households that will see an increase in earnings in 2023.
• The smallest increase will be in Michigan, where the minimum wage goes up 23 cents to $10.10 an hour.
• The biggest rate hike is in Nebraska, with a $1.50 an hour increase to $10.50 an hour.

What About Tipped Employees?

According to a separate report from the Economic Policy Institute, more than a dozen states pay non-tipped employees at the federal minimum of $2.13 per hour. Among those states, some have increased the tipped wage above the federal minimum, notably in North Dakota and Iowa, where the minimum tipped wages are $4.86 and $4.35 an hour, respectively.

Two states — Wyoming and Georgia — have minimum wages below the federal minimum, at $5.15 each. Wyoming’s tipped wage minimum is $2.13 an hour, and Georgia hasn’t established one.

Alabama, Louisiana, Tennessee, Mississippi, South Carolina and Tennessee don’t set minimum wages.

Those who are employed and entitled to minimum wage, but are not receiving adequate payment can file a wage complaint through the Department of Labor and Training.