U.S minimum wages have been discussed far and wide in the past few years. As part of our research to understand where it stands today, we came up with this infographic which was informed by the data we received from the U.S. Department of Labor. From the data, the most prevalent question was why some states have higher minimum wages than others.
Noticeably, states such as Louisiana and Alabama do not have state-specific minimum wage laws. Instead, they rely on the federal minimum wage ($7.25/hr.) in a bid to avoid superfluous legislation. In fact, implementing a universal minimum wage often produces negative economic consequences and burdens locally-owned business by exacerbating financial pressures.
Interestingly, it is also possible to earn less than the federal minimum wage. The most common exception to the federal minimum wage policy is tipped employees - businesses expect that tips will cover the difference between the lower-than-usual salaries and the federal minimum wage.
Additionally, teenagers and workers with disabilities can also be exempt from the federal minimum wage. Ultimately, while the federal minimum wage covers the majority of employees in the United States, exceptions are still present.
Higher Minimum Wages by State
For states with their own minimum wage, it is evident from the infographic above that coastal cities such as New York and California enjoy higher minimum wages than other states. Based on multiple factors including cost of living, political attitudes, economic conditions, and in regards to the federally implemented minimum wage, it is up to each states’ legislature to decide whether to change its minimum wage.
It is no surprise New Yorkers and Californians enjoy higher salaries. Given that these states have higher costs of living; workers are forced to push for higher minimum wages to make ends meet. As long as a state’s proposed minimum wage laws do not conflict with the Constitution or federally enacted policies, the ability to determine minimum wages is entirely within that state’s discretion.
As it stands, according to the U.S. Department of Labor, the District of Columbia and 29 other states have a higher minimum wage than the federal one. Of the remaining states, 14 have minimum wages that are equal to the federal one while 7 have no minimum or have less than the federal minimum.
For the ones without or with a minimum wage less than the federal minimum, then the federal one takes precedent.
Higher Minimum Wage Debate
Understandably, the cost of living is rising every day in the U.S, and with it, so are the calls to raise the federal minimum wage across the country. The consensus is that it has been too long since the minimum wage was reviewed, which has seen it remain the same ($7.25) since 2009.
At the forefront of this debate are retailers such as Target and Walmart. Target earlier this year increased its minimum wage to $12 an hour, paving its way to hitting its 2020 target of $15 an hour. Walmart, on the other hand, raised its minimum wage to $11 in addition to granting some of their long-serving employee’s bonuses.
Amazon, following in the footsteps of the latter two announced that they would be increasing their minimum wage to $15, starting this November. States have also not been left behind as some have enacted wage increases for low-income workers.
Although there have been efforts to raise the federal minimum wage, Sen. Bernie Sanders’ and Sen. Patty Murray’s bill (The Raise Wage Act of 2017), introduced early last year, has not been brought before the committee for consideration. According to Paul Sonn, a director at the National Employment Law Project in charge of state policy, Congress’ Republican majority has blocked any action on the bill, even though it has the backing of bi-partisan majorities.
Where Do We Go from Here?
Although the debate rages on, an increase of the federal minimum wage to the proposed $15 would mean that a third (41 million) of U.S. workers would earn more. This would enable them to afford the basic necessities like a basic apartment, gas, and car payments, without slipping into unmanageable debt.
According to the National Conference of State Legislatures, it is expected that the minimum wage in 20 states will go up, including in the Capital, Washington, D.C. Of the 20 eyeing an increase, half will increase the wage as a result of increased living costs while the other half would be would be following plans to incrementally raise their minimum to $12, $13.50 or $15/hr. over a period of 2 to 5 years.