Nevada’s minimum wage ekes up to $11.25 July 1, will top out at $12 next year

Some Nevadans will get a slight raise July 1 as the state sees its minimum wage increase from $10.50 to $11.25 an adjustment still well below the amount needed to afford average prices of rent and child care.

Nevada lawmakers in 2019 passed legislation to gradually increase the minimum wage each year until hitting $12 in 2024. Organizers had pushed for $15 – a figure they said would help renters afford housing – but Democratic legislative leaders deemed the $12 rate “palatable” for business groups that pushed back against the bill.

Working an average of 40 hours per week, $11.25 equates to about $23,000 per year, before taxes.

Nevada’s increase is smaller than changes in other states, according to Business for a Fair Minimum Wage.

Oregon’s minimum wage increases from $13.50 to $14.20 per hour on July 1, while Washington D.C.’s will jump from $16.10 to $17. 

A few cities will also see minimum wage increases, including $18.07 in San Francisco and $15 in Chicago – businesses with more than 21 employees in Chicago have to pay $15.80. 

Though Oregon has a statewide adjustment, Portland has a separate increase to $15.45 while the minimum in “non-urban counties” goes to $13.20. 

Because Nevada follows Dillon’s rule – a governing principle limiting local authority to actions expressly authorized by the state – cities or counties wouldn’t be able to do individual wage hikes without legislative approval.

State lawmakers took no action to address the minimum wage during the most recent session.

The final scheduled minimum wage increase – to $12 – goes into effect on July 1, 2024. At that time, Nevada will also eliminate its two-tiered system, which allows employers who offer health insurance to pay $1 less per hour.

Legislative efforts to help Nevadans with rent, child care stall

Since the 2019 minimum wage law passed, rents in Nevada have increased more than 20% with some local officials and organizers saying some tenants have seen at least 30% increases. 

The skyrocketing prices, coupled by lacking tenant protections in the state, prompted legal aid groups and housing justice organizers to urge lawmakers to fully address the housing and eviction crisis.

Democratic state Sen. Pat Spearman sponsored legislation to cap rent increases at  5% each year for landlords who own five or more units. The bill, which failed to advance, would have allowed for landlords to seek exemptions from increases if the unit had capital improvements.

“For a minimum wage earner, their wages are more than likely being outpaced by the increase of rental prices,” said Spearman in an April hearing. “Increasing rents affects all of our residents. However, the data demonstrates the gap between income and housing costs is largest for people of color, in particular women of color.”

Republican Gov. Joe Lombardo also vetoed a proposal that would have capped rent increases at 10% for people older than 62 or rely on disability insurance benefits. The cap would only have been in place for a year.

In its 2023 Out of Reach report, the National Low Income Housing Coalition estimates minimum wage workers under the new rate would have to work an average of 82 hours to afford a one-bedroom apartment at market rate rent, $1,196 a month.

The group estimates workers need to make an average of $47,834 a year to afford the average price of a one bedroom apartment.

The U.S. Department Housing and Urban Development defines affordable housing as housing where renters aren’t paying more than 30% of their income for rent and utilities.

At $11.25 an hour, that would mean the unit couldn’t cost more than $585. 

That’s not the only large expense draining some minimum wage workers.

A January report from the U.S. Department of Labor found average households in Nevada spent nearly 20% of their income on rising costs of infant and toddler care. 

The annual median price for child care in Clark County in 2022 was an estimated $14,448, which increased from $12,972 in 2018.

National efforts to increase the minimum wage have failed. President Joe Biden supported a $15 wage, which was initially included in the American Rescue Plan in 2021.

The legislation, which was opposed by all Republicans, needed to go through a Senate maneuver called reconciliation to avoid a filibuster, and would have needed unanimous Democratic support in order to pass. The provision was stripped out for the legislation after failing to get support from Democratic U.S. Sens. Joe Manchin of West Virginia and Krysten Sinema of Arizona.