Minimum wage in the United States

Minimum wage by state and territory vs federal

Minimum wage in the United States refers to the lowest hourly pay that employers can legally pay their workers. The concept of a minimum wage has been a subject of legislation and debate in the United States since the early 20th century. The federal minimum wage is established by the Fair Labor Standards Act (FLSA) and is updated periodically by Congress. However, states and localities have the authority to set their own minimum wages, which can exceed the federal rate.

History

The movement for a minimum wage in the United States began in the late 19th and early 20th centuries as part of a broader labor movement. The first minimum wage law in the United States was passed in Massachusetts in 1912, covering women and children. The federal minimum wage was established in 1938 by the Fair Labor Standards Act, initially set at $0.25 per hour. Since then, it has been increased by Congress 29 times, reflecting changes in the cost of living and economic conditions.

Federal Minimum Wage

As of the last update, the federal minimum wage is $7.25 per hour, a rate that has been in effect since July 24, 2009. The FLSA covers most employees in the United States, but there are exceptions and exemptions, including tipped employees, full-time students, and certain disabled workers, who can be paid at a lower rate under specific conditions.

State and Local Minimum Wages

Many states, cities, and counties have established their own minimum wage laws. When there are differences between federal, state, and local rates, employers are required to pay their workers the highest applicable minimum wage. As a result, minimum wage rates in the United States can vary widely depending on the location. For example, as of the last update, California and Washington, D.C., have some of the highest state-level minimum wages in the country.

Debate and Impact

The minimum wage in the United States is a contentious issue. Proponents argue that increasing the minimum wage improves living standards for low-income workers, reduces poverty, and stimulates consumer spending. Critics, however, contend that higher minimum wages can lead to job losses, particularly in low-skilled and entry-level positions, and may force small businesses to close.

Future Developments

Discussions about the minimum wage continue at both the federal and state levels. Some lawmakers and advocacy groups push for a "living wage" that would be higher than the current minimums, reflecting the true cost of living in various parts of the country. The concept of indexing the minimum wage to inflation, which would automatically adjust the rate to keep pace with the cost of living, is also a topic of ongoing debate.