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Minimum Wage

This guide provides suggested resources on the issues of low wages and income inequality in the United States as they relate to the topic of minimum wage

What is meant by "minimum wage?"

A minimum wage is the lowest wage per hour that a worker may be paid, as mandated by federal law. It is a legally mandated price floor on hourly wages, below which non-exempt workers may not be offered or accept a job. As of 2021, the federal minimum wage rate in the United States is $7.25 per hour. Individual states, cities, and localities may pass different minimum wage requirements.

Investopedia

Additional Information

We've outlined the current minimum wage in each of the 50 U.S. states. As a note, if the state doesn't have a minimum wage, it follows the federal minimum wage, and we've listed the rate as such. For states with a minimum hourly wage lower than the federal wage, we've listed the federal minimum wage, as most employees qualify for $7.25 per hour.

(Effective Date: 01/01/2022)
Greater than federal MW Equals federal MW of $7.25 No MW Required
AK $10.34 CNMI AL
AR $11.00 GA LA
AZ $12.80 IA MS
CA $14.00 ID SC
CO $12.56 IN TN
CT $13.00 KS
DC $15.20 KY
DE $10.50 NC
FL $10.00 ND
HI $10.10 NH
IL $12.00 OK
MA $14.25 PA
MD $12.50 TX
ME $12.75 UT
MI $9.87 WI
MN $10.33 WY
MO $11.15 PR
MT $9.20
NE $9.00
NJ $13.00
NM $11.50
NV $9.75/8.75
NY $13.20
OH $9.30
OR $12.75
RI $12.25
SD $9.95
VA $11.00
VT $12.55
WA $14.49
WV $8.75
VI $10.50
GU $8.75
30 States + DC, GU, & VI 15 States + PR, CNMI 5 States

United States Department of Labor

Congress recognizes the need to eliminate the subminimum wage, which has allowed employers to pay a much smaller base rate to tipped employees, teenagers employed for 90 or fewer days, and disabled workers. The subminimum wage for disabled workers would phase out by 2025, while tipped and temporary teenage workers would see their minimum wages gradually rise until they are equal to the regular minimum wage by 2027.

A new Center for American Progress analysis shows that setting one fair minimum wage for all workers across the nation specifically tipped byt also for disabled and temporary teenage workers, will help alleviate poverty, sustainably grow the economy and advance gender, racial, disability, and economic justice. 

Eight states have already eliminated the tipped minimum wage entirely. This analysis finds that in those states, workers and businesses in tipped industries have done as well as or better than their counterparts in other states over the years since abolishing the subminimum wage. Meanwhile, 16 states use the federal tipped minimum wage of $2.13 per hour. Another 26 states and the District of Columbia have a tipped minimum wage higher than $2.13 but still below the prevailing regular minimum wage.

Center for American Progress (CAP)

Increasing the minimum wage to $15 an hour would reduce the number of Americans living in poverty and boost wages for millions of Americans while adding to the federal debt and joblessness, a new report from the Congressional Budget Office projects.

The federal deficit would increase by about $54 billion over 10 years under a Democratic proposal to gradually increase the federal minimum wage to $15, largely because the higher wages paid to workers, such as those caring for the elderly, would contribute to an increase in federal spending, the estimate found.

The report from the Congressional Budget Office cites several positive and negative effects from raising the minimum wage. On the positive, the number of people living in poverty would fall by about 900,000 once the $15 wage is fully in place in 2025. On the negative, the number of people working would decline by about 1.4 million.

PBS

Raising the minimum wage strengthens workers' purchasing power and, in turn, provides a boost to the overall economy. Raising the minimum wage would also help close the racial wealth gap, which is at historic levels.

The current federal minimum is lower in real value than in 1956. Contrary to many conservative claims, roughly half of all minimum wage workers are adults. At this wage level, people working full-time cannot afford to feed their families. A full-time minimum wage worker makes $15,080, $4,000 below the federal poverty line for a family of three.

Increasing the minimum wage is important not only for economic stability for families, but also for the overall economy. The minimum wage is so low that a full-time worker cannot afford to feed her family and must rely on programs, such as the Supplemental Nutrition Assistance Program (SNAP), to make ends meet. Raising the minimum wage so families are economically more self-sufficient would reduce government spending, saving billions of dollars over just 10 years.

Low-wage workers are also more likely to immediately spend any additional earnings on basic needs and services that they previously could not afford. In turn, demand for local businesses and services rises, strengthening local economies and offsetting any cost increase for businesses. A recent report from the Economic Policy Institute found that increasing the minimum wage to $10.10 by 2015 would result in a $32.6 billion net increase in economic activity over the phase-in period and generate approximately 140,000 new jobs.

Raising the minimum wage is also necessary to close the racial wealth gap. One of the biggest drivers of the racial wealth gap is household income. People of color are overrepresented among low-wage workers. While they made up only 32 percent of the workforce, they represented 42 percent of low-wage workers in 2013. Increasing the minimum wage would particularly benefit workers of color by raising their household income and helping workers of color reach parity with their white counterparts.

The Hill

 

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