There’s No Federal Wage Increase. Instead, State-Led Hikes Tell the Real Story

CLEVELAND 13 (WCTU) — More than 20 states and dozens of localities across the U.S. raised their minimum wages this year, while the federal minimum wage remains unchanged at $7.25 per hour, where it has been since July 24, 2009. Despite several bills introduced in Congress this year to increase the national rate, none have been enacted, leaving states and cities to take the lead on wage policy.

“Workers cannot live on $7.25 in 2025,” said proponents of minimum wage reform, pointing to rising costs of living and stagnant federal policy. In response, state governments, local jurisdictions, and voters have adopted a mix of inflation indexing, legislation, and ballot initiatives to boost wage floors.

Among the most impactful 2025 wage hikes:

District of Columbia increased its base wage to $17.95 on July 1. Tipped workers continue to receive $10 per hour after a timeline pause on phasing out the tip credit.

Washington State now mandates $16.66 statewide, increasing to $17.13 in 2026. Seattle’s local rate tops out at $20.76.

Oregon operates under a three-tier system ranging from $14.05 in non-urban areas to $16.30 in the Portland metro.

New York moved to $16.50 in NYC, Long Island, and Westchester, while the rest of the state rose to $15.50. A 50-cent increase is scheduled for 2026, with inflation indexing to follow in 2027.

California’s fast-food sector with 60 or more locations has paid $20 per hour since April 1, 2024. Health-care workers will see a jump to $24 per hour on July 1, 2025, depending on the facility type.

Florida increased to $14 per hour on Sept. 30 under a 2020 ballot initiative, aiming for $15 in 2026.

Ohio joined this group of states with inflation-tied increases. As of Jan. 1, 2025, the state minimum wage rose to $10.70 per hour for non-tipped employees, and $5.35 per hour for tipped workers. These changes reflect a 2.4 percent inflation adjustment based on CPI-W data measured from September 2023 to August 2024, in accordance with Ohio’s 2006 constitutional amendment that mandates annual adjustments.

However, not all workers in Ohio are covered. Businesses with gross receipts under $394,000 annually are only required to pay the federal minimum of $7.25. Additionally, workers aged 14 and 15 are paid at the federal rate regardless of employer size. Employers must ensure that tipped workers' combined wages and tips reach the full $10.70 hourly rate, or make up the difference.

While Ohio’s increase mirrors inflation, advocates argue it falls short of addressing current living costs. A push for a $15 state minimum wage—phased in over several years and eliminating the tipped subminimum wage—is gaining traction through a potential ballot initiative led by Raise the Wage Ohio. The proposed schedule would raise wages to $12 in 2026, and reach $15 by 2029. Signature gathering is underway, though the process requires over 400,000 valid signatures across at least 44 counties.

Elsewhere in the U.S., tipped wage structures remain varied. Under federal law, employers can pay as little as $2.13 per hour in direct wages, provided tips make up the difference to reach $7.25. Many states set higher tipped wages or disallow the tip credit entirely. D.C. and cities like Chicago are phasing out the credit, though D.C. paused its 2025 increase to extend the transition period.

Industry-specific wage floors are also on the rise. In addition to California’s fast-food and health care sectors, several states have implemented separate wage rules based on business size or job type.

Federal contractors were previously subject to a $17.75 minimum under an executive order, but enforcement shifted in 2025 after the Department of Labor reverted to an older framework. As a result, contract coverage and dates now determine applicable wage levels.

The next wave of increases is expected on July 1 in jurisdictions like Oregon and D.C., while others such as New York and Washington adjust every Jan. 1. In all cases, workers and employers are urged to verify the highest applicable rate among federal, state, and local laws.

“Minimum wage policy is now a local matter,” said labor analysts, citing the failure of Congress to update the federal standard in over 16 years. The result is a patchwork of rules, where a worker’s paycheck can vary dramatically based on ZIP code, employer type, or industry.

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