Minimum Wage by State

Over the previous a number of years, there was a push to extend the federal minimal wage from $7.25 an hour—the place it has sat since 2009—to a minimum of $15. Whereas the federal authorities has but to move such a regulation, many municipalities, such because the District of Columbia and New York Metropolis, have enacted a $15-per-hour regulation. As of 2022, West Hollywood, Calif., may have the best minimal wage price within the nation, at $17.64.

On the bigger state degree, the minimal wage throughout the US ranges from round $15 to as little as $5.15, relying on the state. Listed beneath are the minimal wages set by every state, together with those who have but to determine one.

Key Takeaways

  • The minimal wage is the authorized lowest quantity that an employer will pay an hourly employee.
  • The federal minimal wage has been caught at $7.25 for greater than a decade, however many states have their very own, a lot greater, minimums.
  • Solely two states have minimums decrease than $7.25; in these states, nevertheless, the federal minimal wage nonetheless applies.

On account of the 2022 midterm elections, a poll measure was handed in Nebraska that may enhance its minimal wage from $9 an hour to $10.50 in 2023, with gradual annual will increase to $15 an hour by 2026 and annual inflationary changes in future years. Votes are at present being tallied for the same poll measure to extend Nevada’s minimal wage.

Understanding the Minimal Wage

A minimal wage is the bottom quantity per hour that an employer has to pay lined, nonexempt workers. This represents a legally mandated value ground on hourly wages, which was initially established as a part of the Honest Labor Requirements Act (FLSA). As well as, particular person states may move their very own minimum-wage legal guidelines, setting limits which might be greater (and in just a few instances, decrease) than what was established by the federal authorities.

As of 2022, in keeping with information from the U.S. Division of Labor (DOL), 29 states and the District of Columbia pay greater than the federal wage ground of $7.25. Moreover, our analysis has discovered that a number of state legislatures have insurance policies in place that may increase or have already got raised their minimal wages by set quantities at predetermined dates. For example, Florida residents voted in Nov. 2020 to extend the state’s minimal wage incrementally (starting at $10 per hour on Sept. 30, 2021) till it reaches $15 per hour in September 2026. A number of different states even have measures to extend their minimal wages incrementally to $15 over the subsequent few years.

Of the remaining 21 states, 12 have minimal wages which might be equal to the present federal price. Word that a number of state legislatures don’t have an precise greenback quantity specified of their insurance policies. As a substitute, they merely have a provision in place to make sure that their price all the time matches the federal minimal wage, ought to or not it’s additional elevated. Alabama, Louisiana, Mississippi, South Carolina, and Tennessee are the few remaining states that would not have a longtime minimal wage.

The Highest and Lowest Wages by State

California has the best minimum-wage requirement statewide as of 2022 at $15 (as do elements of New York State). Washington State’s minimal wage is $14.49. Conversely, at $5.15 per hour, Georgia and Wyoming are the one states to have a minimal wage beneath the federal mark of $7.25.

Regardless of the existence of decrease state-approved minimums, federal regulation dictates that the upper of both the state or federal minimal is legally relevant, which signifies that the enforceable minimal wage in Georgia and Wyoming is definitely $7.25. Moreover, which means employers functionally can not pay their nonexempt hourly employees a wage that’s lower than the federal mark. As such, in states with out their very own minimum-wage legal guidelines, the value ground remains to be $7.25 per hour.

In states the place the set minimal wage is above the federal mark, the upper quantity is what applies. Nevertheless, some states even have situations that should be met earlier than their greater charges take impact. For instance, Arkansas’ minimal wage of $11 solely applies to employers of 4 or extra workers. These with three or fewer employers could be required to pay a minimum of $7.25 per hour.

Moreover, there are some states that provide a couple of minimal wage, relying on which class applies to every employer. Basically, which means the best quantity could solely apply underneath sure circumstances. For instance, Minnesota’s highest minimal wage is $10.33 per hour. Nevertheless, this solely applies to workers of a “giant employer” or an “enterprise with annual revenues of $500,000 or extra.” Within the case of a “small employer” or an “enterprise with annual revenues of lower than $500,000,” the minimal wage is $8.42 per hour.

Minimal Wage as Coverage

The minimal wage has lengthy been a divisive concern amongst economists, as some disagree with the idea of a value ground for labor. Every state’s dedication of the minimal wage could replicate the politics of this concern, however different components, resembling the price of residing, additionally could possibly be in play. The federal minimal wage doesn’t robotically enhance to match inflation, and the price of residing just isn’t immediately proportional to the minimal wage in keeping with any official normal. State minimal wages are decided by the states primarily based on any variety of components, as long as the wage equals or is above the federal degree.

There are a number of the explanation why many states haven’t raised their minimal wage limits above the federal price. One of many typical arguments is {that a} hike would result in layoffs and an increase in unemployment. A 2014 research from the Congressional Finances Workplace discovered that a rise within the federal minimal wage would have diminished whole employment by about 500,000 employees (roughly lower than 1% of the entire employed U.S. inhabitants at the moment). Different widespread issues embrace will increase in poverty charges, closures of small companies, and the value of client items.

Nevertheless, there are many causes for elevating the minimal wage. As reported by the Financial Coverage Institute in 2019, the actual worth of the $7.25 minimal wage declined greater than 17% within the final 10 years. As such, it’s straightforward to see how elevating the value ground, if solely to maintain up with inflation, is sensible. Plus, rising the minimal wage has the potential to mitigate present pay inequality.

A more moderen report from the Financial Coverage Institute discovered that holding wages low most hurts “Black employees and different employees of colour,” who already make up a disproportionate share of the severely underpaid. There’s additionally the truth that some arguments appear to disprove—or a minimum of contradict—the objections, together with a number of noting that elevating the minimal wage truly would scale back poverty, enhance financial exercise, and be certain that people can afford on a regular basis necessities.

Arguments each for and towards a minimal wage hike are supported by information which might be restricted to particular person case research, on condition that the value ground truly must be raised earlier than its results could possibly be studied on a widespread degree. Whereas it’s actually potential that elevating the minimal wage may have dangerous penalties, the one factor that’s sure is that doing nothing isn’t making issues higher.

The Backside Line

The minimum-wage disparities that exist amongst states is an indication of how divisive this concern will be, on each particular person and legislative ranges. A superb compromise resolution is to comply with the instance that some states have set—both elevating the minimal wage incrementally or establishing “tiers” for various enterprise sizes. No matter occurs, with out a strategy to predict the long run, it’s practically not possible to know for sure how elevating the minimal wage would impression the U.S. general.

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