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What Is the Federal Minimum Wage?

Every Question You Have About Minimum Wage, Answered

For those working their way up the career ladder in America, the initial rungs of minimum wage can be rough. The federal minimum wage of $7.25 is incredibly small and, depending on where in America you are, it can be impossible to get by with it. With little assistance in sight, money-making issues are very real as wealth inequality continues to widen based on issues like race and ethnicity as well as class.

So how have we arrived at this point and what is being done to solve this problem?

How did minimum wage come about?

Minimum wage was instituted in 1938 as a result of the Fair Labor Standards Act (FLSA). The first wage was set at $0.25, roughly equivalent to $4.19 in today's dollars. The initial push for increased wages came from Massachusetts: the state passed a law in 1912 ensuring that that payments were not less than the cost of living. Yet this law and ensuing state laws were exclusive, only pertaining to women and children.

The 1938 FLSA evened the playing field after shaky national efforts during the Great Depression were shot down by the Supreme Court. The FLSA banned child labor, capped the number of hours mandated on workers, and established the $0.25 base pay. There were exclusions to specific industries (like agriculture and domestic work) and the minimum has been adjusted through the years to match the rising cost of living and to include more industries.

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Currently, minimum wage helps 78.2 million Americans while 29 states and many cities have their own minimum wage laws. Restrictions do apply to disabled workers, student workers, workers under 20, and tipped workers.

What is the likelihood that the minimum wage will increase?

Since the federal minimum wage has not increased since 2009, many are fighting for an increase on local and state levels until sweeping, national change occurs. However, the matter is complicated, as economists worry increasing the minimum wage could decrease hiring or cut back worker hours. Yet some states and cities are slowly increasing the wage minimum to see how it affects the economy and businesses since big hikes from $7.25 to $15.00 have some concerned.

Still, the fight for an increase isn't far-fetched, as the Democrats have made a $15 minimum wage a part of their party platform. A Bernie Sanders-led wage-raising bill was introduced to Congress in April, too. Republican support of raising the minimum appeared to be likely in the 2016 election, although recent actions (and gaffes) reveal the party may block increases. For example: in July 2017, Missouri Republicans passed a law lowering the state's imposed minimum wage to $7.70 in response to a St. Louis measure to increase the minimum to $10. The new law went as far as prohibiting cities and counties from making independent increases.

As for our president, Donald Trump has flip-flopped on increases, saying the minimum should and should not go up. The issue has not been raised significantly in his White House despite his electorate hoping for wage help.

Which states and cities have the highest minimum wage? Which state has the lowest?

Despite $7.25 being the federal minimum wage, many states and cities have ensured higher wages that make more sense for where they are. The District of Columbia currently has the highest minimum wage at $12.50, but many states (California, New York, and DC) are phasing in a $15 minimum over a few years. Arizona, Colorado, and Maine are making efforts to increase their minimums to $12 while Washington and Oregon are moving toward $13.50.

But not every state has made minimum wage a priority: many states maintain the same minimum wage, lower wage, or defer their wage to the federal law. Fourteen states have the same minimum wage as federally mandated while two states — Georgia and Wyoming — have minimum wages lower than federal law, both set at $5.15. Five states — Louisiana, Alabama, Mississippi, South Carolina, and Tennessee — have no minimum wage laws, deferring to the FLSA as their minimum.

Moreover, some cities and counties have pushed for rates higher than the minimums in their states. From Johnson County, IA, to Palo Alto, CA, minimum wages have seen boosts where they deem it necessary. The area with the highest minimum wage is the city of SeaTac in Washington, which has seen its minimum grow to $15.35 this year.

How can you push your state to fix minimum wage?

If you're concerned that efforts to push the minimum wage are going slower than expected or that your state or city is complicit in stagnation, there are ways you can help fix the problem.

Organizations like Fight For $15 are fighting for local and national reform and have held demonstrations in multiple cities to make the matter known. The effort has also targeted fast-food employers like McDonald's, moving the fight beyond Washington DC by making the problem specific to regions and industries.

Similarly, groups like Black Lives Matter, Women's March, and LGBTQ Task Force are taking on the fight for higher minimum wage, as it is an intersectional issue affecting people based on their race, gender, or identity.

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