Minimum Wage Increases on January 1: What Does This Mean For Renters?
- Author: Aubrey Sipes
- Posted: 2025-12-17
Lawmakers and voters in these places have decided to set higher wage floors to help workers keep up with the cost of living.
In total, these changes will boost workers’ pay by about $5 billion across the country.
Who Benefits the Most?
- Women (58.1% of affected workers) make up the majority of those getting raises.
- Black and Hispanic workers are especially likely to benefit. Although Black workers make up 8.7% of the workforce, they are 10.7% of those getting raises. Hispanic workers represent 19.8% of the workforce but 38.3% of those receiving higher pay.
- Most people getting raises are adults (87.4%), not teenagers.
- Parents and children are also affected: 25.3% are parents, and 4.8 million children live in homes where someone will get a raise.
- Nearly half work full-time (49.4%), and many have attended college.
Many workers receiving these increases have low household incomes; 21% are below the poverty line.
Why Minimum Wage Increases Matter
Minimum wage increases put more money into workers’ pockets at a time when the cost of living is going up. With prices for rent, groceries, and other essentials on the rise, earning more helps families make ends meet.
Some states, like Hawaii and Missouri, are seeing especially large increases. For example, Hawaii’s minimum wage is jumping from $14.00 to $16.00 per hour—a full-time worker will make about $1,346 more per year.
Missouri’s increase from $13.75 to $15.00 per hour means a full-time worker will earn $920 more annually.
While prices often go up, pay hasn't kept pace in many places. The federal minimum wage has stayed at $7.25 per hour for more than 15 years, losing value due to inflation.
Now, more states are setting higher minimum wages to help workers afford the basics.
A Growing Movement for Higher Minimum Wages
However, about 14 million workers in other states are still left behind by laws keeping wages low.
Some states are also adjusting minimum wages yearly to keep up with inflation. This helps protect the buying power of workers’ paychecks. But not all states do this, and some policymakers have tried to slow or block further increases.
Can Minimum Wage Increases Help With Rent and Housing?
For many people, housing is their largest expense. When the minimum wage goes up, workers have more money to pay for rent, utilities, or even save towards buying a home.
This is especially important in areas where housing costs have risen faster than wages.
For example, in Hawaii, the $2 per hour boost could mean over $100 extra each month for a full-time worker—money that can help pay rent, keep up with bills, or avoid eviction.
In Seattle, the minimum wage is expected to reach $21.30 by 2026, which will cover a larger share of the average living costs, including rent.
Even if the new minimum wage doesn’t match the full cost of living in every area, the increases make a real difference:
- More families can afford stable housing.
- Fewer people have to choose between paying rent and buying groceries.
- There is less risk of falling behind or becoming homeless.
Because rent and housing costs continue to rise in many parts of the country, it’s important for policymakers to consider setting minimum wages high enough to help workers afford a safe and decent place to live.
Conclusion
Raising the minimum wage in many states is a big step toward helping workers cover everyday expenses and build a better life. It directly boosts pay for millions of people and helps make housing and other basics more affordable.
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Read next: Switching from Renting To Buying a Home in 2026: Which Will Cost Less?
