Minimum wage goes up in 4 New England states Jan. 1 (and NH isn’t one of them)

NASHUA, NH – Maine, Vermont, Rhode Island and Connecticut are among 21 states that will increase their minimum wage on Jan. 1 – paying hourly wages ranging from $14.01 to $16.35 – while New Hampshire remains the only state in New England to retain the $7.25 federal minimum wage.

Connecticut will have the highest hourly minimum wage in New England, at $16.35. Massachusetts, which is not increasing its minimum wage this year, will have the second-highest, at $15 an hour.

New Hampshire does not have a state minimum wage, therefore defaulting to the $7.25-an-hour federal minimum, which hasn’t changed since 2009.

Nationally, 21 states will increase their minimum wages on Jan. 1, according to the Economic Policy Institute. The increases will raise pay for more than 9.2 million workers by a total of $5.7 billion.

In the four New England states that are raising their wage:

Connecticut’s rate will increase from $15.69 to $16.35. Its tipped wage of $6.38 will not increase. A tipped minimum wage is what workers who earn tips are paid by their employer; if  their tips don’t equal the state minimum wage when combined with their hourly rate, the employer is required to make up the balance. Some 242,800 workers, or 15.3% of the state’s workforce, will be directly or indirectly affected by the increase, according to the Economic Policy Institute. The wage increase will add $168,209,000 to wages paid in the state in 2025, with an average $729 a year raise for hourly workers, who will get an average 47 cents an hour hike. The increase will impact households that include an estimated 137,000 children, according to the EPI.

Rhode Island’s minimum wage will increase from $14 to $15 an hour. Its tipped minimum wage of $3.89 will not increase. The change will affect 65,100 workers, which is 13.6% of the state’s workforce, according to the EPI. The amount of money paid to workers in the state will increase by $46,494,000, with an average raise of $767 per hourly worker, who will get an average 53 cents an hour more. The increase is estimated to affect households that include 33,300 children.

Maine’s rate will go up 50 cents, from $14.15 to $14.65, with its tipped minimum wage rising from $7.08 to $7.33. Some 52,000 workers, or 9.1% of Maine’s workforce, will be affected directly or indirectly by the minimum wage increase, according to the EPI. It will increase hourly wages paid in the state to $22,954,000, a $441 average annual increase for hourly workers. The estimated average increase for workers is 30 cents an hour. An estimated 27,200 children live in households that will benefit from Maine’s wage increase.

Maine’s biggest city, Portland, has its own minimum wage, which will rise to $15.50 from $15 an hour on Jan. 1. Its tipped minimum wage will increase from to $7.75 from $7.50.

Vermont’s minimum wage will increase from $13.67 an hour to $14.01. Its tipped minimum wage will increase from $6.84 to $7.01 an hour. The raise will affect 29,100 workers, or 9.9% of the state’s workforce, and add $8,770,000 to wages paid in the state. The average raise per worker will be $302, and the average hourly increase will be 22 cents. Households affected by the increase include an estimated 13,800 children, according to the EPI.

Minimum wage doesn’t apply to people who do household labor, domestic labor, farm labor, outside sales representatives, summer camps for minors, newspaper carriers, non-professional ski patrol and golf caddies.

New Hampshire’s minimum wage

New Hampshire is one of 15 states that doesn’t have its own minimum wage law, instead relying on federal $7.25 an hour rate. It was most recently increased in 2009, the longest stretch without a hike since the 25-cent-an-hour minimum wage was introduced in 1938 as part of the Fair Labor Standards Act.

A bill that would have increased the New Hampshire minimum wage was introduced in the state Senate at the beginning of this year. It called for raising it to $12 an hour on Sept. 1, then to $15 an hour on July 1, 2025. The bill was killed by the Senate in March, shortly after it was introduced.

This year marked the 11th year in a row that a bill to increase the state’s minimum wage was introduced in the Legislature, but didn’t go anywhere. The bill was sponsored by all 10 of the Senate’s Democrats and four House members. It was killed by a 14-10 vote on March 21, with the Senate’s Republicans all voting against it.

Rep. Donna Soucy, D-Manchester, has been the sponsor of the bill for the past 11 years, posted on social media the day she introduced the bill, “Since my first term in the Senate I have been working to increase N.H.’s minimum wage. I won’t stop until we finally recognize the dignity of work & respect our workers by increasing the wage to $15 per hour!”

Soucy added in a video, “Between a housing affordability crisis and a workforce shortage, it’s about time that we value work and workers here in New Hampshire. And besides, given the wages that our surrounding states are now paying, we are truly behind the times.”

Both Soucy and Sen. Shannon Chandley, D-Amherst, acknowledged to the media that most hourly workers in the state make a wage higher than the minimum.

“But those are the very same people that we should be raising the minimum wage for,” Chandley told the Keene Sentinel. “Those people who are making minimum wage deserve to be making something closer to a living wage.”

Opponents said that the state works just fine without a higher minimum wage.

“The market is working,” Sen. Bill Gannon, R-Sandown, chairman of the Commerce Committee, said. He said the state’s “real” minimum wage “is probably $13 to $14 dollars,” and that businesses he checked with are “paying in double figures.”

Opponents also argued that businesses can’t afford it.

“Certain employers and living conditions and cost of living, say in the North Country versus Nashua or Salem, are very different, and I’m not sure the same level of wages would match up that well,” said Sen. Sen. Daniel Innis, R-Bradford.

The state’s tipped wage is $3.75 an hour for any worker who makes more than $30 in tips a month (an employer must make up the difference if an employees tips, added to that wage, are less than the minimum wage). Gov. Chris Sununu in 2021 signed a bill that would freeze that rate if the federal minimum wage increases.

Economic studies that found raising the minimum wage can lead to hours decreases and job losses, also found that those negative effects are minimal when compared to the larger benefits to workers of making more money, as well as the benefit to the economy as a whole when low-wage earners have more money in their pocket.

When the labor market is tight, businesses must pay more to get workers, and the wages New Hampshire’s businesses pay reflect that to a certain extent. But economists say that the $7.25 hourly minimum could become a concern if the labor market loosens up.

“It’s as tenuous as it gets,” Kathryn Anne Edwards, a labor economist and policy consultant, told the New York Times. “The labor market has gained ground, but policy has not cemented that territory.”

The median hourly wage in New Hampshire is $24.03, according to the most recent numbers from the federal Bureau of Labor Statistics. Median means half of workers earn more and half less.

The lowest earning workers in New Hampshire are food preparation serving-related workers, who make a median wage of $10.24. They’re followed by dining room and cafeteria attendants, who make a median hourly wage of $10.54.

A year previous, though the state’s median hourly wage was lower – $23.04 – the lowest earners made a slightly higher wage. Dining room and cafeteria attendants and bartender helpers earned $10.48 an hour, followed by personal care and service workers, who made $10.61.

In neighboring Maine, the median hourly wage is lower than New Hampshire’s, at $22.88, but that number is also determined by what the higher-wage earners make. In Maine, food preparation workers make a median hourly wage of $17.13 an hour, and dining room and cafeteria attendants earn $17.14 an hour. The lowest median wage in Maine was $13.80 an hour earned by parking attendants, followed by sewing and hand-stitching workers, at $14.17 an hour.

What the minimum wage means nationally

The Economic Policy Institute said the 2025 increases “show that the minimum wage continues to be a powerful tool for combating racial and gender wage disparities, supporting working families, and reducing poverty.”

Of the coming increases nationally, the EPI found:

• Women make up 58.2% of workers getting a raise.
• Black workers make up 9.1% of the wage-earning workforce in the states with increases, but represent 11.3% of those affected by a wage hike.
• Hispanic workers are 19.5% of the workforce in states with wage increases, but represent 38.8% of the workers getting a wage hike.
• Parents make up 25.7% of affected workers; 5.3 million children live in households where an individual will receive a minimum wage increase.
• Families with income below the poverty line represent 20.4% of affected workers
• Families with incomes below twice the poverty line represent 48.5% of affected workers.
• have family incomes below twice the poverty line.
• Although teenage workers are disproportionately likely to be minimum wage workers, 88% of affected workers are adults.
• Full-time workers make up 50.4% of affected workers
• Those who work at least 20 hours a week represent 86.5% of affected workers.
• Workers who have completed at least some education beyond a high school degree make up 41.4% of affected workers.