On Jan. 1, Massachusetts will raise the minimum wage to $15 an hour, a benchmark activists have long pushed to meet the ever-growing cost of living.
It’s the final step in a multi-year series of wage increases, the result of a 2018 act known as the “grand bargain” that made sweeping changes to workplace policies. At the beginning of 2022, base pay increased to $14.25 an hour, up from $13.50 the year prior.
The “service rate,” or the pay given to tipped employees, will rise to $6.75 in Massachusetts, up from $6.15.
Massachusetts is among the 86 jurisdictions instituting wage hikes over the course of 2023, according to the National Employment Law Project, an advocacy organization that supports higher minimum wages. A total of six states and 51 cities and counties will enact a minimum wage of at least $15 an hour for some or all employees, according to the NELP.
Elsewhere in New England, Rhode Island is increasing its minimum wage to $13 (up from $12.25). Vermont is hiking its minimum wage to $13.18 (up from $12.55), and in Maine the minimum wage will be $13.80 (up from $12.75.)
As of Jan. 1, Massachusetts will have one of the highest minimum wages in the country, below only Washington, DC ($16.10), Washington state ($15.74), and California ($15.50), according to the NELP. But some cities are going even further, such as SeaTac, Washington ($19.06) and Mountain View, Calif., home to Google, ($18.15).
Still, Massachusetts, unlike California and Washington, lacks cost-of-living provisions, meaning that the minimum wage will not continue to increase even if inflation, which is at a four-decade high, persists.
To be sure, the historic wage increase comes amid a complicated economic landscape, when $15 lacks the purchasing power it once had. This is due to rampant inflation, which is currently up 7.1 percent from the same time last year, according to the Consumer Price Index. Even though many employees got a pay boost this year — either through raises or through finding higher-paying jobs — it wasn’t enough to keep pace with the rising costs of rent, gas, food, and other expenses.
In this year’s tight labor market, many employers made the move to increase minimum wages on their own in an effort to lure in workers. Target set a new starting wage range from $15 to $24, Stop & Shop workers secured a contract locking in $15-an-hour for part-time employees and $17.30 for full-time employees, and Verizon upped their base pay to $20 an hour.
The federal minimum wage — workers’ base pay in states without their own minimum wage laws — remains $7.25 an hour, unchanged since 2009.
“While it is encouraging to see boosts to the minimum wage in cities and states across the country, we need federal policy to address the mounting crises brought about by record increases in the cost of living and pandemic recovery,” said Rebecca Dixon, executive director of NELP, in a statement. “We must pass a higher federal minimum wage — at least $15 an hour — that accounts for rising costs of living and ensures that workers have the ability to support themselves and their families.”
Dana Gerber can be reached at dana.gerber@globe.com. Follow her @danagerber6.