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Workers in half of the nation will earn more money in the new year thanks to an increase in the minimum wage. That’s good news for older workers, because research has found that hikes in the minimum wage help them stay in the workforce longer, leading to improved finances in retirement.
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Twenty-nine states and the District of Columbia have minimum wages higher than the $7.25 per hour required by federal law for non-tipped workers. Virginia will see the largest increase in 2022, boosting its minimum wage by $1.50 per hour after previously scheduled increases were delayed due to revenue losses experienced by businesses and the state during the pandemic. Delaware is raising its rate by $1.25 per hour. And six states — California, Connecticut, Florida, Illinois, New Jersey and New Mexico —are raising their minimum wage by $1 per hour.
According to data from the U.S. Bureau of Labor Statistics, roughly 20 percent of workers who earn their state’s minimum wage are age 45 or older. One study by researchers from the University of Northern Iowa and the U.S. Census Bureau found that people who received minimum wage increases between ages 62 and 70 delayed claiming Social Security retirement benefits by an average of six months.
“[M]inimum wage increases in the United States have helped increase the financial well-being of older individuals by encouraging delayed retirement claiming and increased labor supply later in life," the study said.
The following states will see minimum wage increases in 2022; most increases will take effect on Jan. 1. In Connecticut, Nevada and Oregon, the increase will occur on July 1, and in Florida, the wage increase will start on Sept. 30. In some cases, employers with fewer than 15 workers may be exempt from paying their state’s minimum wage.
— Source: Paycor and Labor Law Center.