Minimum wage in the United States

Minimum wage by U.S. state and territory, as of January 1, 2016.
Versus the federal rate:
  Higher   Same   Lower
  No state minimum wage law

The minimum wage in the United States is set by a network of federal, state, and local statutes. Workers generally must be paid no less than the statutory minimum wage as specified by either the federal, state, or local government. As of July 2015, the federal government mandates a nationwide minimum wage level of $7.25 per hour. Effective January 1, 2015 there were 29 states with a minimum wage higher than the federal minimum. From 2014 to 2015, nine states increased their minimum wage levels through automatic adjustments, while increases in 11 other states occurred through legislative or ballot changes. The federal minimum wage peaked at about $10 in 1968, as measured in 2014 inflation-adjusted dollars.[1]

On March 26, 2014, Connecticut passed legislation to raise the minimum wage from $8.70 to $10.10 by 2017, the first state to address President Obama's call for an increase in the minimum wage.[2] In 2014, a number of U.S. cities, including San Francisco, Seattle and Los Angeles,[3][4] approved the gradual raising of their minimum wages to $15 an hour. On July 1, 2018, San Francisco will become the first U.S. city to raise its minimum wage to $15 an hour.[5] Los Angeles and Seattle won't have minimum wages of $15 an hour until years later.[6][7]

The Congressional Budget Office (CBO) estimated in 2014 that raising the minimum wage to $10.10 and indexing it to inflation would increase the wages of 16.5 million workers in 2016, while raising it to $9.00 without indexing would affect 7.6 million.[8] Among workers paid by the hour in 2013, 1.5 million were reported as earning exactly the prevailing federal minimum wage. About 1.8 million were reported as earning wages below the minimum. Together, these 3.3 million workers with wages at or below the minimum represent 2.5% of all workers and 4.3% of hourly workers.[9]

History

In 1912, Massachusetts organized a commission to recommend non-compulsory minimum wages for women and children. Within eight years, at least thirteen U.S. states and the District of Columbia would pass minimum wage laws.[10] The Lochner era United States Supreme Court consistently invalidated compulsory minimum wage laws. The laws were considered unconstitutional for interfering with the ability of employers to freely negotiate appropriate wage contracts with employees.[11]

No business which depends for existence on paying less than living wages to its workers has any right to continue in this country.

President Franklin Delano Roosevelt, 1933[12]

The first attempt at establishing a national minimum wage came in 1933, when a $0.25 per hour standard was set as part of the National Industrial Recovery Act. However, in the 1935 court case Schechter Poultry Corp. v. United States (295 U.S. 495), the United States Supreme Court declared the act unconstitutional, and the minimum wage was abolished. The minimum wage was re-established in the United States in 1938 (pursuant to the Fair Labor Standards Act), once again at $0.25 per hour ($4.23 in 2015 dollars[13]). In United States v. Darby Lumber Co. (1941), the Supreme Court upheld the Fair Labor Standards Act, holding that Congress had the power under the Commerce Clause to regulate employment conditions.[14]

Recent legislation

Since it was last reset on July 24, 2009, the federal minimum wage in the United States has been $7.25 per hour. Some U.S. territories (such as American Samoa) are exempt. Some types of labor are also exempt: employers may pay tipped labor a minimum of $2.13 per hour, as long as the hour wage plus tip income equals at least the minimum wage. Persons under the age of 20 may be paid $4.25 an hour for the first 90 calendar days of employment (sometimes known as a youth, teen, or training wage) unless a higher state minimum exists.[15] The July 24, 2009 increase was the last of three steps of the Fair Minimum Wage Act of 2007. The wage increase was signed into law on May 25, 2007, as a rider to the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007. The bill also contained almost $5 billion in tax cuts for small businesses.

Voters in six states (Arizona, Colorado, Missouri, Montana, Nevada, and Ohio) in 2006 approved statewide increases in the state minimum wage. The amounts of these increases ranged from $1 to $1.70 per hour and all increases were designed to annually index to inflation.[16] Some politicians in the United States have advocated linking the minimum wage to the Consumer Price Index, thereby increasing the wage automatically each year based on increases to the Consumer Price Index. So far, Arizona, Ohio, Oregon, Missouri, Vermont and Washington have linked their minimum wages to the consumer price index. Minimum wage indexing also takes place each year in Florida, San Francisco, California, and Santa Fe, New Mexico.

In April 2014, the U.S. Senate debated the Minimum Wage Fairness Act (S. 1737; 113th Congress). The bill would amend the Fair Labor Standards Act of 1938 (FLSA) to increase the federal minimum wage for employees to $10.10 per hour over the course of a two-year period.[17] The bill was strongly supported by President Barack Obama and many of the Democratic Senators, but strongly opposed by Republicans in the Senate and House.[18][19][20] Later in the year, voters in the Republican-controlled states of Alaska, Arkansas, Nebraska and South Dakota considered ballot initiatives to raise the minimum wage above the national rate of $7.25 per hour. In all four states the initiatives were successful. The results provide further evidence that raising minimum pay has support across party lines.[21]

Local ordinances

On June 2, 2014, the City Council of Seattle, Washington passed a local ordinance to increase the minimum wage of the city to $15 an hour,[22] giving the city the highest minimum wage in the United States,[23][24] which will be phased in over seven years, to be fully implemented by 2021.[25] A growing number of California cities have enacted local minimum wage ordinances, including Los Angeles, San Francisco, Oakland, Berkeley, Emeryville, Mountain View, Richmond, and San Jose.

In September 2014, the Los Angeles City Council approved a minimum salary for hotel workers of $15.37 per hour.[26] In April 2016, The Los Angeles Times reported that there is an exemption for unionised workers, and interviewed longtime workers at unionised Sheraton Universal who make $10/hr, whereas non-union employees at a non-union Hilton a few feet away make at least the $15.37 mandated by law for non-unionised employees.[27] Similar exemptions have been adopted in San Francisco, San Jose, Oakland and Santa Monica.

On August 18, 2015, the El Cerrito City Council directed city staff to draft a local minimum wage ordinance based on a template provided by a coalition for a county-wide minimum wage effort. The details are not final, but Council discussed an initial increase of roughly 28 - 36% ($11.52 - $12.25 or more) by January 1, 2016, with annual increases that will result in a $15 hourly wage rate by 2018-2020. Council did not direct staff to create small business exemptions (or any other exemptions), but a slower phase-in rate may be considered for employees of small businesses. The city will have outreach for residents and business owners to discuss the details of the proposed ordinance. Staff hopes to present a draft for Council's approval as early as Oct/Nov 2015.[28]

Trends in purchasing power

History of the federal minimum wage in real 2013 dollars and nominal dollars.

The minimum wage had its highest purchasing value in 1968, when it was $1.60 per hour ($10.88 in 2014 dollars).[13] From January 1981 to April 1990, the minimum wage was frozen at $3.35 per hour, then a record-setting wage freeze. From September 1, 1997 through July 23, 2007, the federal minimum wage remained constant at $5.15 per hour, breaking the old record. From the United States Department of Labor. Employment Standards Administration. Wage and Hour Division, the source page has a clickable US map with current and projected state-by-state minimum wage rates for each state. Some government entities, such as counties and cities, observe minimum wages that are higher than the state as a whole. One notable example of this is Santa Fe, New Mexico, whose $9.50 per hour minimum wage was the highest in the nation,[29][30][31] until San Francisco increased its minimum wage to $9.79 in 2009.[32] Another device to increase wages, living wage ordinances, generally apply only to businesses that are under contract to the local government itself.

Since 1984, the purchasing power of the federal minimum wage has decreased. Measured in real terms (adjusted for inflation) using 1984 dollars, the real minimum wage was $3.35 in 1984, $2.90 in 1995, $2.74 in 2005, and $3.23 in 2013. If the minimum wage had been raised to $10.00 in 2013, that would have equated to $4.46 in 1984 dollars.[33][34]

Economic effects

The economic effects of raising the minimum wage are controversial. Adjusting the minimum wage may affect current and future levels of employment, prices of goods and services, economic growth, income inequality and poverty. The interconnection of price levels, central bank policy, wage agreements, and total aggregate demand creates a situation in which the conclusions drawn from macroeconomic analysis are highly influenced by the underlying assumptions of the interpreter.[35]

Employment and job creation

CBO table with projections of the effects of minimum wage increases on employment and income, under two scenarios

Neo-Classical economics argues that raising the price of something results in a lower quantity demanded, in this case fewer workers. Conceptually, if an employer does not believe a worker generates value equal to or in excess of the minimum wage, that worker will not be hired or retained.[36] Empirical work in the 1990s contradicted this basic model. In a landmark study in 1994, economists David Card and Alan Krueger compared the effect on employment in 410 restaurants in New Jersey and eastern Pennsylvania following an increase in the New Jersey minimum wage from $4.25 to $5.05 in April 1992. The study found "no indication that the rise in the minimum wage reduced employment."[37] However, a 1995 study re-analyzed the evidence from this experiment using payroll data and found that this data suggests that the increase in New Jersey's minimum wage resulted in a 4.6% decrease in employment in that state.[38]

In February 2014, the CBO reported the theoretical effects of a federal minimum wage increase under two scenarios, an increase to $10.10 with indexing for inflation thereafter and an increase to $9.00 with no indexing:

Estimated minimum wage effects on employment from a meta-study of 64 studies showed insignificant employment effect (both practically and statistically) from the minimum-wage raises supporting the Keynesian model. The most precise estimates were heavily clustered at or near zero employment effects (elasticity = 0).[39]

A 2013 Center for Economic and Policy Research (CEPR) review of multiple studies since 2000 indicated that there was "little or no employment response to modest increases in the minimum wage." The study indicated 11 reasons for this finding, the most important including: "reductions in labor turnover; improvements in organizational efficiency; reductions in wages of higher earners ('wage compression'); and small price increases."[40] Another CEPR study in 2014 found that job creation within the United States is faster within states that raised their minimum wage.[41] In 2014, the state with the highest minimum wage in the nation, Washington, exceeded the national average for job growth in the United States.[42]

One study concluded that a 10% increase in the minimum wage lowers low-skill employment by 2-4% and total restaurant employment by 1-3%.[43] Some argue that an increasing minimum wage might reduce youth employment (since these workers are likely to have fewer skills than older workers).[44] Overall, there is no consensus between economists about the effects of minimum wages on youth employment.[45] The Economist wrote in December 2013: "A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs...Some studies find no harm to employment from federal or state minimum wages, others see a small one, but none finds any serious damage."[46]

Prices

Conceptually, raising the minimum wage increases the cost of labor, all other things being equal. Employers may accept lower profits or raise their prices or both. If their prices increase, consumers may demand a lesser quantity of the product, substitute other products or switch to imported products. Marginal producers (those who are barely profitable enough to survive) may be forced out of business if they cannot raise their prices sufficiently to offset the higher cost of labor. Whether the increased income of the workers benefiting from the minimum wage increase can offset these effects is debatable.[36] Some economic research has shown that restaurant prices rise in response to minimum wage increases.[47]

Economic growth

Whether growth (GDP, a measure of both income and production) increases or decreases depends significantly on whether the income shifted from owners to workers results in an overall higher level of spending. The tendency of a consumer to spend their next dollar is referred to as the marginal propensity to consume or MPC. The transfer of income from higher income owners (who tend to save more, meaning a lower MPC) to lower income workers (who tend to save less, with a higher MPC) can actually lead to an increase in total consumption and higher demand for goods, leading to increased employment.[8]

The CBO reported in February 2014 that income (GDP) overall would be marginally higher after raising the minimum wage, indicating a small net positive increase in growth. Raising the minimum wage to $10.10 and indexing it to inflation would result in a net $2 billion increase in income during the second half of 2016, while raising it to $9.00 and not indexing it would result in a net $1 billion increase in income.[8]

Income inequality

Minimum wage levels in developed economies as a share of median full-time wage. The relative minimum wage ratio in the U.S. is shown in red.[48]

An increase in the minimum wage is a form of redistribution from higher-income persons (business owners or "capital") to lower income persons (workers or "labor") and therefore should reduce income inequality. The CBO estimated in February 2014 that raising the minimum wage under either scenario described above would improve income inequality. Families with income more than 6 times the poverty threshold would see their incomes fall (due in part to their business profits declining with higher employee costs), while families with incomes below that threshold would rise.[8]

Poverty

CBO estimated in February 2014 that raising the minimum wage would reduce the number of persons below the poverty income threshold by 900,000 under the $10.10 option versus 300,000 under the $9.00 option.[8]

Federal budget deficit

The CBO reported in February 2014 that "[T]he net effect on the federal budget of raising the minimum wage would probably be a small decrease in budget deficits for several years but a small increase in budget deficits thereafter. It is unclear whether the effect for the coming decade as a whole would be a small increase or a small decrease in budget deficits." On the cost side, the report cited higher wages paid by the government to some of its employees along with higher costs for certain procured goods and services. This might be offset by fewer government benefits paid, as some workers with higher incomes would receive fewer government transfer payments. On the revenue side, some would pay higher taxes and others less.[8]

Quality of jobs

Minimum wage jobs rarely include health insurance coverage,[49][50] although that is changing in some parts of the United States where the cost of living is high, such as California or Massachusetts.

Commentary

Economists

 Effective Minimum Wage
Adjusted for Cost of Living
for Select U.S. Cities (2015)[51][52]
City Effective
minimum wage
Seattle $8.51
Denver $7.57
New York City $7.50
Houston $7.26
United States $7.25
San Francisco $7.03
Chicago $7.01
Boston $6.59
Washington DC $6.53
Los Angeles $6.38
Atlanta $5.15

In 2014, over 600 economists signed a letter in support of a $10.10 minimum wage increase with research suggesting that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth.[53][54][55][56] Also, seven recipients of the Nobel Prize in Economic Sciences were among 75 economists endorsing an increase in the minimum wage for U.S. workers and said "the weight" of economic research shows higher pay doesn’t lead to fewer jobs.[57][58][59]

According to a February 2013 survey of the University of Chicago IGM Forum, which includes approximately 40 economists:

According to a paper written in 2000 by Fuller and Geide-Stevenson, 73.5% (27.9% of which agreed with provisos) of American economists agreed that a minimum wage increases unemployment among unskilled and young workers, while 26.5% disagreed with this statement.[61]

Economist Paul Krugman advocated raising the minimum wage moderately in 2013, citing several reasons, including:

Politicians

Former President Bill Clinton advocated raising the minimum wage during 2014: "I think we ought to raise the minimum wage because it doesn’t just raise wages for the three or four million people who are directly affected by it, it bumps the wage structure everywhere...The estimates are that 35 million Americans would get a pay raise if the federal minimum wage was raised...If you [raise the minimum wage] in a phased way, it always creates jobs. Why? Because people who make the minimum wage or near it are struggling to get by, they spend every penny they make, they turn it over in the economy, they create jobs, they create opportunity, and they take better care of their children. It’s just the right thing to do, but it’s also very good economics."[63]

Polls

The Pew Center reported in January 2014 that 73% of Americans supported raising the minimum wage from $7.25 to $10.10 per hour. By party, 53% of Republicans and 90% of Democrats favored this action.[64]

A Lake Research Partners poll in February 2012 included the following findings:

List of minimum wage levels by jurisdiction

This is a list of the minimum wages (per hour) in each state and territory of the United States, for jobs covered by federal minimum wage laws. If the job is not subject to the federal Fair Labor Standards Act, then state, city, or other local laws may determine the minimum wage.[66] A common exemption to the federal minimum wage is a company having revenue of less than $500,000 per year while not engaging in any interstate commerce.

Under the federal law, workers who receive a portion of their salary from tips, such as waitstaff, are required only to have their total compensation, including tips, meet the minimum wage. Therefore, often, their hourly wage, before tips, is less than the minimum wage.[67] Seven states, and Guam, do not allow for a tip credit.[68] Additional exemptions to the minimum wage include many seasonal employees, student employees, and certain disabled employees as specified by the FLSA.[69]

In addition, some counties and cities within states may observe a higher minimum wage than the rest of the state in which they are located; sometimes this higher wage will apply only to businesses that are under contract to the local government itself, while in other cases the higher minimum will be enforced across the board.

Federal

Type Min Wage ($/h) Notes
Tipped $2.13 The Fair Labor Standards Act requires a minimum wage of $2.13 for tipped workers with the expectation that wages plus tips total no less than $7.25 per hour. The employer must pay the difference if total income does not add up to $7.25 per hour.[70]
Non-tipped $7.25 Per the Fair Minimum Wage Act of 2007 (FMWA) since July 24, 2009.[71]
Youth $4.25 Per the Fair Minimum Wage Act of 2007 (FMWA) since July 24, 2009, persons under the age of 20 may be paid $4.25 for the first 90 calendar days of their employment.[15]

State

State Min Wage
($/h)[72]		 Tipped
($/h)[73][74]		 Youth/
Training
($/h)[75]		 Notes
Alabama None[76]
Alaska $9.75 $9.75 Alaska's minimum wage increased to $9.75 on Jan 1, 2016.
Arizona $8.05 $5.05 Arizona's minimum wage increased to $8.05 on January 1, 2015.[77] The state tipped minimum wage is $3 per hour less. Pursuant to Arizona Proposition 202 (2006), the rates are adjusted annually on January 1 based on the U.S. Consumer Price Index. This rate increase does not affect student workers in places such as libraries and cafeterias because those positions are given by universities, which are state entities.[78]
Arkansas $8.00 $2.63 Arkansas' minimum wage increased to $8.00 on Jan, 2016 and will increase to $8.50 by 2017.[79] The current rate is applicable to employers of 4 or more employees.[80]
California $10.00[81] $10.00 On March 28, 2016, legislators and Unions reached an agreement to increase the minimum wage to $15.00 by 2022.[82] California's minimum wage increased to $10.00 on January 1, 2016.[83] Berkeley: $11.00 since October 1, 2015 and will increase to $12.53 effective October 1, 2016.[84] Emeryville: $14.44 for businesses with 56 or more employees; $12.75 for businesses with 55 employees or less, effective July, 2015.[85] Jackson Rancheria: $10.60 since January 1, 2014 on the Tribe's sovereign 1,500-acre reservation in Amador County.[86] Oakland: $12.55 since January 1, 2016.[87] Unions are exempt from Oakland's minimum wage law.[88] Los Angeles: will increase to $15.00 by 2020.[89] Unions are exempt from Los Angeles's minimum wage law.[88] San Francisco: $12.25 since May 1, 2015 and will increase to $15.00 by 2018.[90] Unions are exempt from San Francisco's minimum wage law.[88] San Jose: $10.30 since January 1, 2015.[91] Unions are exempt from San Jose's minimum wage law.[88]
Colorado $8.31[92] $5.29 Changes yearly in response to inflation.[93] The tipped wage is $3.02 less than the minimum wage [94]
Connecticut $9.60 $5.78 Connecticut's minimum wage increased to $9.60 on January 1, 2016.[95] On March 26, 2014, the state passed legislation to raise the minimum wage to $10.10 by January 1, 2017.[2] Connecticut's tipped minimum wage is 65.2% of the state minimum wage (tipped employees defined as $10/wk or $2/day in tips).[96]
Delaware $8.25 $2.23 Delaware's minimum wage increased to $8.25 on June 1, 2015.[97]
Florida $8.05[98] $5.03 Florida's minimum wage is increased annually based upon a cost of living formula, following a 2004 ballot referendum.[98] Florida's minimum wage increased to $8.05 and the tipped minimum wage to $5.03 on January 1, 2015.[99]
Georgia $5.15
[100][101]		 $2.13 Only applicable to employers of 6 or more employees. If fewer than six, then there is no minimum at all. The state law excludes from coverage any employment that is subject to the Federal Fair Labor Standards Act when the federal rate is greater than the state rate.[102]
Hawaii $8.50 $7.75 Hawaii's minimum wage increased to $8.50 on January 1, 2016, and will increase to $10.10 by January 1, 2018. Tipped employees earn 75 cents less than the current state minimum wage.[103]
Idaho $7.25[104] $3.35
Illinois $8.25 $4.95 $7.75 Employers may pay anyone under the age of 18, or anyone for the first 90 days of employment, fifty cents less. Tipped employees earn 60% of the minimum wage (employers may claim credit for tips, up to 40% of wage) There is also a training wage for tipped employees.[105] Chicago: $10.00 from July 1, 2015 and will increase to $13.00 by 2019.[106] Unions are exempt from Chicago's minimum wage law.[88]
Indiana $7.25[107] $2.13
Iowa $7.25[108] $4.35 Most small retail and service establishments grossing less than $300,000 annually are not required to pay the minimum wage. Tipped employees can be paid 60% of the minimum wage.
Kansas $7.25[109] $2.13 Kansas had the lowest legislated, non-tipped worker, minimum wage in the U.S., $2.65/hr., until it was raised to $7.25, effective January 1, 2010.[110]
Kentucky $7.25[111] $2.13 Louisville: $8.10 from July 1, 2015 and will increase to $9.00 by 2017.[112][113]
Louisiana None[76]
Maine $7.50 $3.75 Tipped rate is half of the current state minimum wage.[114] On July 6, 2015, the city council of Portland voted 6-3 to raise the city's minimum wage to $10.10 beginning on January 1, 2016 — an increase of 34%.[115]
Maryland $8.25 $3.63 Maryland's minimum wage will increase by increments to $10.10 by July 1, 2018. Wage increases are as follows, $8.00 on January 1, 2015; $8.25 on July 1, 2015; $8.75 on July 1, 2016; $9.25 on July 1, 2017; and $10.10 on July 1, 2018.[116][117] Montgomery and Prince George's Counties: Starting October 1, 2015, the minimum wage for these two counties is $9.55.[118]
Massachusetts $10.00 $3.35 Massachusetts' minimum wage increased to $10.00 ($3.35 for tipped workers) on January 1, 2016 and will increase to $11.00 ($3.75 for tipped workers) on January 1, 2017 making it the highest minimum-wage in the country at the state level. Massachusetts is the only state in the country that mandates time-and-a-half for retail workers working on Sunday. When the state minimum wage takes full effect at $11 an hour in 2017 the effective minimum wage for a retail worker working on Sunday is $16.50 an hour.[119]
Michigan $8.50[120] $3.23 $4.25 Michigan's minimum wage will increase to $9.25 by September 2018 and increase with inflation yearly after 2018. Minors under 18 years of age may be paid a minimum hourly wage rate of $7.25 per hour. Tipped workers must earn standard minimum wage once tips are included.
Minnesota $9.00[100] $9.00 $7.25[121] Small employers, whose annual receipts are less than $500,000 and who do not engage in interstate commerce, can pay their employees $7.25 per hour. Overtime applies after 48 hours per week.[121] Note: For large-employer, the minimum wage became $9.00 on Aug 1, 2015; and will become $9.50 on Aug 1, 2016. For small-employer the minimum wage became $7.25 on Aug 1, 2015; and will become $7.75 on Aug 1, 2016. Beginning January 1, 2018, all minimum wage rates will increase by the national implicit price deflator or 2.5%, whichever is lower.[122]
Mississippi None[76]
Missouri $7.65 $3.825 Missouri's minimum wage rate is automatically adjusted annually based on the U.S. Consumer Price Index rounded to the nearest five cents, and increased to $7.65 on January 1, 2015.[123] In the St. Louis area, minimum wage was set to increase to $8.25,[124] but the law was voided in October 2015 as a new statewide bill barring cities from setting their own minimum wages had been passed in the meantime.[125]
Montana $8.05 $8.05 Montana's minimum wage rate is automatically adjusted annually based on the U.S. Consumer Price Index, and increased to $8.05 on January 1, 2015. Income from tips cannot offset an employee's pay rate. The state minimum wage for business with less than $110,000 in annual sales is $4.00.[72]
Nebraska $9.00[126] $2.13 Minimum wage increased to $9.00 Jan 1, 2016.[80]
Nevada $8.25 $8.25 The minimum wage has been $8.25 ($1 higher than the federal minimum) since July 1, 2010. Employers who offer health benefits can pay employees $7.25.[127] The rate is adjusted every July 1, based on the federal minimum or the accumulated inflation since 2006, whichever is higher, based on a 2006 Minimum Wage Amendment to the Nevada Constitution.[128]
New Hampshire $7.25[129] $3.27
New Jersey $8.38[130] $2.13 New Jersey's minimum wage increased to $8.38 on January 1, 2015.[131][132]
New Mexico $7.50 $2.13 Santa Fe: $10.84 since January 1, 2015.[133] Albuquerque: $8.75 since January 1, 2015.[134]
New York $9.00[135] Varies The Minimum Wage rate increased to $9.00 on December 31, 2015.[136] New York State also has a minimum for exempt employees of $543.75 per week as of July 24, 2009.[137] Tipped employee minimum ranges from $4.90 to $5.65 depending on industry.[74] Effective December 31, 2013, there are different rules for the minimum cash wage for employers employing tipped employees outside of the hospitality industry, (e.g., in car washes and in salons). For workers earning more than $1.95 on average per hour in tips, the minimum cash wage will be $6.05 per hour; for workers earning between $1.20 and $1.95 in tips on average per hour, the cash wage is $6.80 [138]
North Carolina $7.25[139] $2.13
North Dakota $7.25[140] $4.86 Tipped minimum is 67% of the minimum wage.[74]
Ohio $8.10 $4.05 $7.25[141] This rate is adjusted annually on January 1 based on the U.S. Consumer Price Index[142] and increased to $8.10 on January 1, 2015 and will remain at $8.10 for all of 2016 as inflation stayed the same. The rate is $7.25 for employers grossing $283,000 or less.[143]
Oklahoma $7.25[144] $2.13 Oklahoma's minimum wage for employers grossing under $100,000 and with fewer than 10 employees per location is $2.00.[145](OK Statutes 40-197.5).
Oregon $9.25 $9.25 On March 2, 2016, Senate Bill 1532 was signed into law, increasing minimum wage depending on the county. Beginning July 1 the minimum wage will increase to $9.75 for non-rural counties and to $9.50 for rural counties, thereafter increasing each year by fixed amounts until June 30, 2022 when the minimum wage will be $14.75 for the Portland metro area, $13.50 for other non-rural counties, and $12.50 for rural counties. Thereafter, the minimum wage will be adjusted each year based on the U.S. Consumer Price Index.[146]
Pennsylvania $7.25[147] $2.83
Rhode Island $9.60 $3.39 Rhode Island's minimum wage increased to $9.60 Jan 1, 2016.
South Carolina None[76]
South Dakota $8.55[148] $4.25 South Dakota's minimum wage increased to $8.55 on January 1, 2016, and is indexed to inflation. The minimum wage for those under 18 is $7.50.
Tennessee None[76]
Texas $7.25[149] $2.13
Utah $7.25 $2.13
Vermont $9.60[150] $4.80 Vermont's minimum wage increased to $9.60 on January 1, 2016,[151] will increase to $10.50 by January 1, 2018, and will be indexed to inflation beginning on January 1, 2019 which will eventually make it the highest minimum wage at the state level.[152]
Virginia $7.25[153] $2.13
Washington $9.47[154] $9.47[154] $8.05[155] Minimum wage increases annually by a voter-approved cost-of-living adjustment based on the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).[156] Seattle: $11.00 since April 1, 2015 and will increase to $15.00 by 2017 for businesses with over 500 employees, and for all businesses by 2021.[157][158] SeaTac: $15.00 for airport-related businesses.[159] Union workshops are exempt from SeaTac's $15 minimum wage law.[160] Washington is particularly unique in the fact that not only does it have one of the highest state minimum wages in the country but it also is among a minority that do not have a statewide income tax.
West Virginia $8.75[161] $2.62 West Virginia's minimum wage increased to $8.75 on December 31, 2015.[162] The state minimum wage is applicable to employers of six or more employees at one location not involved in interstate commerce.[72] The state's minimum wage for tipped employees is 30% of the federal minimum wage.[74]
Wisconsin $7.25[163] $2.33
Wyoming $5.15[100] $2.13

Territory

Territory Min Wage ($/h)[72] Notes
American Samoa $4.18–$5.59 Varies by industry.[164] On September 30, 2010, President Obama signed legislation that delays scheduled wage increases for 2010 and 2011. On July 26, 2012, President Obama signed S. 2009 into law, postponing the minimum wage increase for 2012, 2013, and 2014. Annual wage increases of $0.50 recommenced on September 30, 2015 and will continue every three years until all rates have reached the federal minimum.[165]
Guam $8.25 Tipped employee minimum $6.55[166]
Northern Mariana Islands $6.05 Since September 30, 2012. Wages were to go up $0.50 annually to the $7.25 rate by 2015.[167] Bill S. 256 to delay the planned increases to the full rate until 2018 passed in Sept. 2013.[168]
Puerto Rico $7.25 Employers covered by the Federal Fair Labor Standards Act (FLSA) are subject only to the federal minimum wage and all applicable regulations. Employers not covered by the FLSA will be subject to a minimum wage that is at least 70 percent of the federal minimum wage or the applicable mandatory decree rate, whichever is higher. The Secretary of Labor and Human Resources may authorize a rate based on a lower percentage for any employer who can show that implementation of the 70 percent rate would substantially curtail employment in that business.

Puerto Rico also has minimum wage rates that vary according to the industry. These rates range from a minimum of $5.08 to $7.25 per hour.

U.S. Virgin Islands $7.25 Except businesses with gross annual receipts of less than $150,000, then $4.30. (In practice, the Virgin Islands adopts the federal per hour rate)

Federal District

Federal District Min Wage ($/h) Notes
District of Columbia $10.50 This rate is automatically set at $1 above the federal minimum wage rate.[169] The tipped wage in Washington, D.C., is $2.77 per hour.[74] A law enacted in January 2014 will have annual increases every July; $10.50 in 2015, and $11.50 in 2016. Afterwards the increases will be based on the region's cost of living.[170]

Jobs affected by the minimum wage

The jobs that are most likely to be directly affected by the minimum wage are the ones that pay a wage close to the minimum.

According to the May 2006 National Occupational Employment and Wage Estimates,[171] the four lowest-paid occupational sectors in May 2006 (when the federal minimum wage was $5.15 per hour) were the following:

Sector Workers Employed Median Wage Mean Wage Mean Annual
Food Preparation and Serving Related Occupations 11,029,280 $7.90 $8.86 $18,430
Farming, Fishing, and Forestry Occupations 450,040 $8.63 $10.49 $21,810
Personal Care and Service Occupations 3,249,760 $9.17 $11.02 $22,920
Building and Grounds Cleaning and Maintenance Occupations 4,396,250 $9.75 $10.86 $22,580

Two years later, in May 2008, when the federal minimum wage was $5.85 per hour and was about to increase to $6.55 per hour in July 2008, these same sectors were still the lowest-paying, but their situation (according to Bureau of Labor Statistics data)[172] was:

Sector Workers Employed Median Wage Mean Wage Mean Annual
Food Preparation and Serving Related Occupations 11,438,550 $8.59 $9.72 $20,220
Farming, Fishing, and Forestry Occupations 438,490 $9.34 $11.32 $23,560
Personal Care and Service Occupations 3,437,520 $9.82 $11.59 $24,120
Building and Grounds Cleaning and Maintenance Occupations 4,429,870 $10.52 $11.72 $24,370

In 2006, workers in the following 13 individual occupations received, on average, a median hourly wage of less than $8.00 per hour:[171]

Occupation Workers Employed Median Wage Mean Wage Mean Annual
Gaming Dealers 82,960 $7.08 $8.18 $17,010
Waiters and Waitresses 2,312,930 $3.14 $4.27 $11,190
Combined Food Preparation and Serving Workers, Including Fast Food 2,461,890 $7.24 $7.66 $15,930
Dining Room and Cafeteria Attendants and Bartender Helpers 401,790 $7.36 $7.84 $16,320
Cooks, Fast Food 612,020 $7.41 $7.67 $15,960
Dishwashers 502,770 $7.57 $7.78 $16,190
Ushers, Lobby Attendants, and Ticket Takers 101,530 $7.64 $8.41 $17,500
Counter Attendants, Cafeteria, Food Concession, and Coffee Shop 524,410 $7.76 $8.15 $16,950
Hosts and Hostesses, Restaurant, Lounge, and Coffee Shop 340,390 $7.78 $8.10 $16,860
Shampooers 15,580 $7.78 $8.20 $17,050
Amusement and Recreation Attendants 235,670 $7.83 $8.43 $17,530
Bartenders 485,120 $7.86 $8.91 $18,540
Farmworkers and Laborers, Crop, Nursery, and Greenhouse 230,780 $7.95 $8.48 $17,630

In 2008, only two occupations paid a median wage less than $8.00 per hour:[172]

Occupation Workers Employed Median Wage Mean Wage Mean Annual
Gaming Dealers 91,130 $7.84 $9.56 $19,890
Combined Food Preparation and Serving Workers, Including Fast Food 2,708,840 $7.90 $8.36 $17,400

According to the May 2009 National Occupational Employment and Wage Estimates,[173] the lowest-paid occupational sectors in May 2009 (when the federal minimum wage was $7.25 per hour) were the following:

Sector Workers Employed Median Wage Mean Wage Mean Annual
Gaming Dealers 86,900 $8.19 $9.76 $20,290
Combined Food Preparation and Serving Workers, Including Fast Food 2,695,740 $8.28 $8.71 $18,120
Waiters and Waitresses 2,302,070 $8.50 $9.80 $20,380
Dining Room and Cafeteria Attendants and Bartender Helpers 402,020 $8.51 $9.09 $18,900
Cooks, Fast Food 539,520 $8.52 $8.76 $18,230

See also

References

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  75. ↑ Applies to persons under age 20, for the first 90 days of employment (per FMWA), unless otherwise noted.
  76. 1 2 3 4 5 No state minimum wage law. Federal rates apply, although some small businesses exempt from FMWA may not be covered.
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  140. ↑ http://www.nd.gov/labor/laws/34-06.html
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  142. ↑ "Ohio minimum wage to go up 10 cents next week". Cleveland Plain Dealer. December 30, 2010.
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  146. ↑ Text of SB 1532
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  157. ↑ "Seattle Minimum Wage Ordinance". Seattle Office of Civil Rights. Retrieved 23 April 2015.
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  159. ↑ "SeaTac: The small US town that sparked a movement against low wages". Guardian. 2014-02-22. Retrieved 2015-05-05.
  160. ↑ Raising the minimum wage without raising havoc, Washington Post, September 5, 2014
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  163. ↑ "The Wisconsin's 2009 Minimum Wage Rates". Wisconsin Department of Workforce Development. July 24, 2009.
  164. ↑ "Wage Rate in American Samoa" (PDF). Department of Labor Wage and Hour Division.
  165. ↑ "President Obama signs Minimum Wage delay into Law". US Dept of Labor. October 1, 2012.
  166. ↑ State Allows no credit for tips. "Minimum Wages for Tipped Employees". US Department of Labor. January 1, 2013. Retrieved 2013-09-25.
  167. ↑ http://www.dol.gov/whd/regs/compliance/posters/cnmi.pdf
  168. ↑ http://thehill.com/blogs/floor-action/house/321443-dems-vote-with-gop-to-delay-minimum-wage-hike-in-northern-mariana-islands
  169. ↑ "Wage and Hour Compliance". District of Columbia Department of Employment Services. Retrieved 2013-09-25.
  170. ↑ DeBonis, Mike (January 15, 2014). "D.C. minimum wage hike is signed into law". The Washington Post.
  171. 1 2 "National Occupational Employment and Wage Estimates United States". US Bureau of Labor Statistics. May 2006. Retrieved 2013-10-06.
  172. 1 2 "National Occupational Employment and Wage Estimates United States". US Bureau of Labor Statistics. May 2008. Retrieved 2013-10-06.
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