The minimum wage in the United States is set by US labor law and a range of state and local laws. Employers generally have to pay workers the highest minimum wage prescribed by federal, state, and local law. Since July 24, 2009, the federal government has mandated a nationwide minimum wage of $7.25 per hour. As of January 2018, there were 29 states with a minimum wage higher than the federal minimum. From 2017 to 2018, eight states increased their minimum wage levels through automatic adjustments, while increases in eleven other states occurred through referendum or legislative action. Washington has the highest state minimum wage at $11.50 per hour.
Using 2017 inflation-adjusted dollars, the federal minimum wage peaked at $11.53 per hour in 1968. If the minimum wage in 1968 had kept up with labor's productivity growth, it would have reached $19.33 in 2017. There is a racial difference for support of a higher minimum wage with most black and Hispanic individuals supporting a $15.00 federal minimum wage, and 54% of whites opposing it. In 2015, about three percent of white, Asian, and Hispanic or Latino workers earned the federal minimum wage or less. Among black workers, the percentage was about four percent.
History
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Minimum wage legislation emerged at the end of the nineteenth century from the desire to end sweated labor which had developed in the wake of industrialization. Sweatshops employed large numbers of women and young workers, paying them what were considered nonliving wages that did not allow workers to afford the necessaries of life. Besides substandard wages, sweating was also associated with long work hours and unsanitary work conditions. From the 1890s to the 1920s, during the Progressive Era, a time of social activists and political reform across the United States, progressive reformers, women’s organizations, religious figures, academics, and politicians all played an important role in getting state minimum wage laws passed throughout the United States.
The first successful attempts at using minimum wage laws to ameliorate the problem of nonliving wages occurred in the Australian state of Victoria in 1896. Factory inspector reports and newspaper reporting on the conditions of sweated labor in Melbourne, Victoria led in 1895 to the formation of the National Anti-Sweating League which pushed the government aggressively to deal legislatively with the problem of substandard wages. The government, following the recommendation of the Victorian Chief Secretary Alexander Peacock, established wage boards which were tasked with establishing minimum wages in the labor trades which suffered from nonlivable wages. During the same time period, campaigns against sweated labor were occurring in the United States and England.
Progressive Era
In the United States in 1890, a group of concerned female reformers who wanted to improve the harsh conditions of sweated workers formed the Consumer’s League of the City of New York. The consumer group sought to improve working conditions by boycotting products which were made under sweated conditions and did not conform to a code of “fair house†standards drawn up by them. Similar, consumer leagues formed throughout the United States, and in 1899, they united under the National Consumer League (NCL) parent organization. Consumer advocacy, however, was extremely slow at changing conditions in the sweated industries. When NCL leaders in 1908 went to an international anti-sweatshop conference in Geneva, Switzerland and were introduced to Australian minimum wage legislation, which had successfully dealt with sweated labor, they came home believers and made minimum wage legislation part of their national platform.
In 1910, in conjunction with advocacy work led by Florence Kelley of the National Consumer League, the Women’s Trade Union League (WTLU) of Massachusetts under the leadership of Elizabeth Evans took up the cause of minimum wage legislation in Massachusetts. Over the next two years, a coalition of social reform groups and labor advocates in Boston pushed for minimum wage legislation in the state. On June 4, 1912, Massachusetts passed the first minimum wage legislation in the United States, which established a state commission for recommending non-compulsory minimum wages for women and children. The passage of the bill was significantly assisted by the Lawrence textile strike which had raged for ten weeks at the beginning of 1912. The strike brought national attention to the plight of the low wage textile workers, and pushed the state legislatures, who feared the magnitude of the strike, to enact progressive labor legislation.
By 1923, fifteen U.S. states and the District of Columbia had passed minimum wage laws, with pressure being placed on state legislatures by the National Consumers League in a coalition with other women's voluntary associations and organized labor. The United States Supreme Court of the Lochner era (1897â€"1937), however, consistently invalidated labor regulation laws. Advocates for state minimum wage laws hoped that they would be upheld under the precedent of Muller v. Oregon (1908), which upheld maximum working hours laws for women on the grounds that women required special protection that men did not. The Supreme Court, however, did not extend this principle to minimum wage laws. The court ruled in Adkins v. Children's Hospital (1923) that the District of Columbia's minimum wage law was unconstitutional, because the law interfered with the ability of employers to freely negotiate wage contracts with employees. The court also noted that women did not require anymore special protection by the law, following the passage in 1920 of the Nineteenth Amendment, which gave women the right to vote and equal legal status.
New Deal
In 1933, the Roosevelt administration during the New Deal made the first attempt at establishing a national minimum wage regiment with the National Industrial Recovery Act, which set minimum wage and maximum hours on an industry and regional basis. The Supreme Court, however, in Schechter Poultry Corp. v. United States (1935) ruled the act unconstitutional, and the minimum wage regulations were abolished. Two years later after President Roosevelt's overwhelming reelection in 1936 and discussion of judicial reform, the Supreme Court took up the issue of labor legislation again in West Coast Hotel Co. v. Parrish (1937) and upheld the constitutionality of minimum wage legislation enacted by Washington state and overturned the Adkins decision which marked the end of the Lochner era. In 1938, the minimum wage was re-established pursuant to the Fair Labor Standards Act, this time at a uniform rate of $0.25 per hour ($4.78 in 2017 dollars). The Supreme Court upheld the Fair Labor Standards Act in United States v. Darby Lumber Co. (1941), holding that Congress had the power under the Commerce Clause to regulate employment conditions.
The 1938 minimum wage law only applied to "employees engaged in interstate commerce or in the production of goods for interstate commerce," but in amendments in 1961 and 1966, the federal minimum wage was extended (with slightly different rates) to employees in large retail and service enterprises, local transportation and construction, state and local government employees, as well as other smaller expansions; a grandfather clause in 1990 drew most employees into the purview of federal minimum wage policy, which now set the wage at $3.80.
Legislation
The federal minimum wage in the United States was reset to its current rate of $7.25 per hour in July 2009. 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. The 2009 increase was the last of three steps of the Fair Minimum Wage Act of 2007, which was signed into law as a rider to the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007, a bill that also contained almost $5 billion in tax cuts for small businesses.
Inflation indexing
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. In 2006, voters in six states (Arizona, Colorado, Missouri, Montana, Nevada, and Ohio) 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. So far, 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.
Living wage protests
Since 2012, a growing protest and advocacy movement called "Fight for $15", initially growing out of fast food worker strikes, has advocated for an increase in the minimum wage to a living wage. Since the start of these protests, a number of states and cities have increased their minimum wage. In 2014 Connecticut passed legislation to raise the minimum wage from $8.70 to $10.10 per hour by 2017, making it one of about six states to aim at or above $10.00 per hour at the time. In 2014 and 2015, several cities, including San Francisco, Seattle, Los Angeles, and Washington D.C. passed ordinances that gradually increase the minimum wage to $15.00 per hour. In 2016 New York and California became the first states to pass legislation that would gradually raise the minimum wage to $15 per hour in each state.
In April 2014, the U.S. Senate addressed the minimum wage issue by debating the Minimum Wage Fairness Act. The bill would have amended 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. 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. Later in 2014, 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, which were successful in all four states. The results provided evidence that raising minimum wage has support across party lines.
In April 2017, Senator Bernie Sanders and Senator Patty Murray, backed by 28 of the Senate's Democrats, introduced new federal legislation which would raise the minimum wage to $15 per hour by 2024 and index it to inflation. The Raise the Wage Act of 2017, which was simultaneously introduced in the House of Representatives with 166 Democratic cosponsors, would raise the minimum wage to $9.25 per hour immediately, and then gradually increase it to $15 per hour by 2024, while simultaneously raising the minimum wage for tipped workers and phasing it out. The legislation was introduced according to Senator Bernie Sanders to make sure that every worker has at least a modest and decent standard of living.
As of 2017, legislation has passed in multiple states that significantly raises the minimum wage. California is set to raise its minimum wage to $15.00 per hour by January 1, 2023. Colorado is set to raise its minimum wage from $9.30 per hour to $12 per hour by January 1, 2020, raising $0.90 per year. New York has also recently passed legislation to increase its minimum wage to $15.00 per hour over time, certain counties and larger companies are set on faster schedules than others. A number of other cities and states across the country are also debating and enacting legislation to increase the minimum wage for low wage workers to a livable wage.
Local ordinances
On June 2, 2014, the City Council of Seattle, Washington was the first city to pass a local ordinance to increase the minimum wage of the city to $15.00 per hour, which will be phased in over seven years, to be fully implemented by 2021. For employers of 500 or more employees without health benefits, the minimum wage rose to $15.00 per hour in 2017. For employees with health benefits, the minimum wage will raise to $15.00 per hour by 2018. For smaller employees, the $15.00 per hour wage takes effect at different times. Seattle is one of the first cities with a plan that after the minimum $15.00 per hour wage takes effect, they increase minimum wage by a certain percentage every year based on inflation. Numerous cities have followed Seattle's example since. San Francisco is expected to become the first U.S. city to reach a minimum wage of $15.00 per hour on July 1, 2018. New York City's minimum wage will be $15.00 per hour by the end of 2018. The minimum wage in Los Angeles and Washington, D.C., will be $15.00 per hour in 2020. A growing number of other California cities have also enacted local minimum wage ordinances to increase the minimum wage to $15.00 per hour, including Berkeley, El Cerrito, Emeryville, Mountain View, Oakland, Richmond, and San Jose.
Union exemptions
In September 2014, the Los Angeles City Council approved a minimum salary for hotel workers of $15.37 per hour. 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 $10.00 per hour, whereas non-union employees at a non-union Hilton less than 500 feet away make at least the $15.37 mandated by law for non-unionised employees. Similar exemptions have been adopted in other cities. As of December 2014, unions were exempt from minimum wage ordinances in Chicago, Illinois, SeaTac, Washington, and Milwaukee County, Wisconsin, as well as the California cities of Los Angeles, San Francisco, Long Beach, San Jose, Richmond, and Oakland. In 2016, the Washington, D.C. Council passed a minimum wage ordinance that included a union waiver, but Mayor Vincent Gray vetoed it. Later that year, the council approved an increase without the union waiver.
Trends in purchasing power
Since its inception the purchasing power of the minimum wage has fluctuated. The minimum wage had its highest purchasing power in 1968, when it was $1.60 per hour ($11.49 in 2017 dollars). From January 1981 to April 1990, the minimum wage was frozen at $3.35 per hour, then a record-setting minimum 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. 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, until San Francisco increased its minimum wage to $9.79 in 2009. 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, $2.33 in 1994, $1.84 in 2004, and $1.46 in 2014. If the minimum wage had been raised to $10.10 in 2014, that would have equated to $4.40 in 1984 dollars. This would have been equal to a 31% increase in purchasing power, despite the nominal value of the minimum wage increasing by 216% in the same time period.
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 conclusions drawn from macroeconomic analysis are highly influenced by the underlying assumptions of the interpreter.
Employment and job creation
In neoclassical economics, the law of demand states thatâ€"all else being equalâ€"raising the price of any particular good or service reduces the quantity demanded. Therefore, neoclassical economists argue thatâ€"all else being equalâ€"raising the minimum wage will have adverse effects on employment. Conceptually, if an employer does not believe a worker generates value equal to or in excess of the minimum wage, they do not hire or retain that worker.
Other economists of different schools of thought argue that a limited increase in the minimum wage does not affect or increases the number of jobs available. Economist David Cooper for instance estimates that a higher minimum wage would support the creation of at least 85,000 new jobs in the United States. This divergence of thought began with empirical work on fast food workers in the 1990s which challenged the neoclassical model. In 1994, economists David Card and Alan Krueger studied employment trends among 410 restaurants in New Jersey and eastern Pennsylvania following New Jersey's minimum wage hike (from $4.25 to $5.05) in April 1992. They found "no indication that the rise in the minimum wage reduced employment." In contrast, a 1995 analysis of the evidence by David Neumark found that the increase in New Jersey's minimum wage resulted in a 4.6% decrease in employment. Neumark's study relied on payroll records from a sample of large fast-food restaurant chains, whereas the Card-Krueger study relied on business surveys.
A literature review conducted by David Neumark and William Wascher in 2007 (which surveyed 101 studies related to the employment effects of minimum wages) found that about two-thirds of peer-reviewed economic research showed a positive correlation between minimum wage hikes and increased unemploymentâ€"especially for young and unskilled workers. Neumark's analysis further found that, when looking at only the most credible research, 85% of studies showed a positive correlation between minimum wage hikes and increased unemployment. Neumark was also part of a study that compared areas that have received minimum wage hikes that were in proximity to each other and areas that are farther apart and they concluded that there is always net job loss experienced.
In 2005, T.D. Stanley showed that Card and Krueger's results could signify either publication bias or the absence of a minimum wage effect. However, using a different methodology, Stanley concluded that there is evidence of publication bias and that correction of this bias shows no relationship between the minimum wage and unemployment. In 2008, Hristos Doucouliagos and T.D. Stanley conducted a similar meta-analysis of 64 U.S. studies on disemployment effects and concluded that Card and Krueger's initial claim of publication bias is still correct. Moreover, they concluded, "Once this publication selection is corrected, little or no evidence of a negative association between minimum wages and employment remains." In 2013, a meta-analysis of 16 U.K. studies found that the minimum wage has no significant effects on employment.
The Congressional Budget Office (CBO) in 2014 estimated the theoretical effects of a federal minimum wage increase under two scenarios: an increase to $9.00 and an increase to $10.10. According to the report, approximately 100,000 jobs would be lost under the $9.00 option, whereas 500,000 jobs would be lost under the $10.10 option (with a wide range of possible outcomes).
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." Another CEPR study in 2014 found that job creation within the United States is faster within states that raised their minimum wage. In 2014, the state with the highest minimum wage in the nation, Washington, exceeded the national average for job growth in the United States. Washington had a job growth rate 0.3% faster than the national average job growth rate.
A 2012 study led by Joseph Sabia estimated that the 2004-6 New York State minimum wage increase (from $5.15 to $6.75) resulted in a 20.2% to 21.8% reduction in employment for less-skilled, less-educated workers. Another study by Sabia in 2008 concluded that a 10% increase in the minimum wage was associated with an 8.8% reduction in employment and an 11.8% reduction in hours for uneducated single mothers. A study led by Richard Burkhauser in 2000 concluded that minimum wage increases "significantly reduce the employment of the most vulnerable groups in the working-age populationâ€"young adults without a high school degree (aged 20-24), young black adults and teenagers (aged 16-24), and teenagers (aged 16-19)." A 2007 study by Daniel Aaronson and Eric French concluded that a 10% increase in the minimum wage decreased low-skill employment by 2-4% and total restaurant employment by 1-3%.
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...High minimum wages, however, particularly in rigid labour markets, do appear to hit employment. France has the rich world’s highest wage floor, at more than 60% of the median for adults and a far bigger fraction of the typical wage for the young. This helps explain why France also has shockingly high rates of youth unemployment: 26% for 15- to 24-year-olds."
Prices
Conceptually, raising the minimum wage increases the cost of labor, ceteris paribus. Thus, employers may accept lower profits, raise their prices, or both. If prices increase, consumers may demand a lesser quantity of the product, substitute other products, or switch to imported products, due to the effects of price elasticity of demand. 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. Federal Reserve Bank of Chicago research from 2007 has shown that restaurant prices rise in response to minimum wage increases. However, there are studies that show that higher prices for products due to increased labor cost are usually only by about 0.4% of the original price.
Effects on crime
A 2016 White House report based on "back of envelope calculations and literature review" argued that higher hourly wages led to less crime. The study by the Council of Economic Advisers calculated that "raising the minimum wage reduces crime by 3 to 5 percent." To get those numbers, the study assumed that "such a minimum wage increase would have no employment impacts, with an employment elasticity of 0.1 the benefits would be somewhat lower."
In contrast in a 1987 journal article, Masanori Hashimoto noted that minimum wage hikes lead to increased levels of property crime in areas affected by the minimum wage after its increase. According to the article, by decreasing employment in poor communities, total legal trade and production are curtailed. The report also argued that to compensate for the decrease in legal avenues for production and consumption, poor communities increasingly turn to illegal trade and activity.
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. Recent research has shown that higher wages lead to greater productivity.
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.
Income inequality
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.
Poverty
Among hourly-paid workers In 2016, 701,000 earned the federal minimum wage and about 1.5 million earned wages below the minimum.Together, these 2.2 million workers represented 2.7% of all hourly-paid workers.
The 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. Similarly, Arindrajit Dube, professor of economics at University of Massachusetts Amherst, found in a 2017 study "robust evidence that higher minimum wages lead to increases in incomes among families at the bottom of the income distribution and that these wages reduce the poverty rate." According to the study "a 10 percent increase in the minimum wage reduces the nonelderly poverty rate by about 5 percent."
In contrast, research conducted by David Neumark and colleagues in 2004 found that minimum wages are associated with reductions in the hours and employment of low-wage workers. A separate study by the same researchers found that minimum wages tend to increase the proportion of families with incomes below or near the poverty line. Similarly, a 2002 study led by Richard Vedder, professor of economics at Ohio University, concluded that "The empirical evidence is strong that minimum wages have had little or no effect on poverty in the U.S. Indeed, the evidence is stronger that minimum wages occasionally increase poverty…"
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.
Commentary
Economists
According to a survey conducted by economist Greg Mankiw, 79% of economists agreed that "a minimum wage increases unemployment among young and unskilled workers."
A 2015 survey conducted by the University of New Hampshire Survey Center found that a majority of economists believes raising the minimum wage to $15 per hour would have negative effects on youth employment levels (83%), adult employment levels (52%), and the number of jobs available (76%). Additionally, 67% of economists surveyed believed that a $15 minimum wage would make it harder for small businesses with less than 50 employees to stay in business.
A 2006 survey conducted by economist Robert Whaples of a sample of 210 Ph.D. economists randomly selected from the American Economic Association, found that, regarding the U.S. minimum wage:
- 46.8% favored eliminating it
- 14.3% favored keeping it the same
- 1.3% favored decreasing it
- 5.2% favored increasing it by about 50 cents per hour
- 15.6% favored increasing it by about $1 per hour
- 16.9% favored increasing it by more than $1 per hour
In 2014, over 600 economists signed a letter in support of increasing the minimum wage to $10.10 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. 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.
According to a February 2013 survey of the University of Chicago IGM Forum, which includes approximately 40 economists:
- 34% agreed with the statement that "Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment", with 32% disagreeing and 24% uncertain
- 42% agreed that "...raising the minimum wage to $9 per hour and indexing it to inflation...would be a desirable policy", with 11% disagreeing or strongly disagreeing and 32% uncertain.
According to a fall 2000 survey conducted by Fuller and Geide-Stevenson, 73.5% (27.9% of which agreed with provisos) of American economists surveyed[How many?] agreed that minimum wage laws increase unemployment among unskilled and young workers, while 26.5% disagreed with the statement.
Economist Paul Krugman advocated raising the minimum wage moderately in 2013, citing several reasons, including:
- The minimum wage was below its 1960s purchasing power, despite a near doubling of productivity;
- The great preponderance of the evidence indicates there is no negative impact on employment from moderate increases; and
- A high level of public support, specifically Democrats and Republican women.
Major political parties
Democratic candidates, elected officials, and activists support an increase in the minimum wage. In his 2013 State of the Union Address, President Barack Obama called for an increase in the federal minimum wage to $9 an hour; several months later, Democrats Tom Harkin and George Miller proposed legislation to increase the federal minimum wage to $10.10; and in 2015, congressional Democrats introduced a proposal to increase the federal minimum wage to $12 an hour. These efforts did not succeed, but increases in city and state minimum wages prompted congressional Democrats to continue fighting for an increase on the federal level. After much internal party debate, the party's official platform adopted at the 2016 Democratic National Convention stated: "We should raise the federal minimum wage to $15 an hour over time and index it, give all Americans the ability to join a union regardless of where they work, and create new ways for workers to have power in the economy so every worker can earn at least $15 an hour."
Most Republican elected officials oppose action to increase the minimum wage, and have blocked Democratic efforts to increase the minimum wage. Republican leadership such as Speakers of the House John Boehner and Paul Ryan have opposed minimum wage increases. Some Republicans oppose having a minimum wage altogether, while a few, conversely, have supported minimum wage increases or indexing the minimum wage to inflation.
Former President Bill Clinton advocated raising the minimum wage in 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."
Polls
The Pew Center reported in January 2014 that 73% of Americans supported raising the minimum wage from $7.25 to $10. By party, 53% of Republicans and 90% of Democrats favored this action. Pew found a racial difference for support of a higher minimum wage in 2017 with most blacks and Hispanics supporting a $15.00 federal minimum wage, and 54% of whites opposing it.
A Lake Research Partners poll in February 2012 found the following:
- Strong support overall for raising the minimum wage, with 73% of likely voters supporting an increase to $10 and indexing it to inflation during 2014, including 58% who strongly support the action;
- Support crosses party lines, with support from 91% of Democrats, 74% of Independents, and 50% of Republicans; and
- A majority (56%) believe that raising the minimum wage will help the economy, 16% believe it won't make a difference, and only 21% felt it would hurt the economy.
List 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. 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. Seven states, and Guam, do not allow for a tip credit. Additional exemptions to the minimum wage include many seasonal employees, student employees, and certain disabled employees as specified by the FLSA.
In addition, some counties and cities within states may implement a higher minimum wage than the rest of their state. Sometimes this higher wage applies only to businesses that contract with the local government, while in other cases the higher minimum applies to all work.
Federal
State
The average US minimum wage per capita (2017) is $8.49 based on the population size of each state and generally represents the average minimum wage experienced by a person working in one of the fifty US states. Cities, counties, districts, and territories are not included in the calculation. As of October 2016, there have been 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 referendum or legislative action. Beginning in January 2017, Massachusetts and Washington state have the highest minimum wages in the country, at $11.00 per hour. New York City's minimum wage will be $15.00 per hour by the end of 2018.
Territory
Federal District
Low-paying occupations, 2006 and 2009
Jobs that a minimum wage is most likely to directly affect are those that pay close to the minimum.
According to the May 2006 National Occupational Employment and Wage Estimates, the four lowest-paid occupational sectors in May 2006 (when the federal minimum wage was $5.15 per hour) were the following:
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) was:
In 2006, workers in the following 13 individual occupations received, on average, a median hourly wage of less than $8.00 per hour:
In 2008, only two occupations paid a median wage less than $8.00 per hour:
According to the May 2009 National Occupational Employment and Wage Estimates, the lowest-paid occupational sectors in May 2009 (when the federal minimum wage was $7.25 per hour) were the following:
See also
References
External links
- Minimum wage in the United States at Curlie (based on DMOZ)
- Federal Minimum Wage. United States Department of Labor Wage and Hour Division.
- Minimum Wages for Tipped Employees. United States Department of Labor Wage and Hour Division.
- History of Federal Minimum Wage United States Department of Labor Wage and Hour Division.
- U.S. Minimum Wage History. Oregon State University â€" Wealth and Poverty (Anth 484). Last updated December 26, 2012.
- Maps and charts of minimum wage vs. housing costs - National Low Income Housing Coalition (advocacy group)