Minimum Wage by State

Many legislators and U.S. citizens propose increasing the federal minimum wage to $15 per hour from $7.25, a rate enacted in 2009. While the federal government has yet to pass a revision, many states and municipalities have independently changed their hourly rates. The minimum wage across the United States ranges from $17 to as low as $5.15, depending on the state.

History of the Minimum Wage

A minimum wage is the lowest hourly rate an employer pays covered, nonexempt employees, established as part of the Fair Labor Standards Act (FLSA). Individual states may also pass their minimum-wage laws, setting limits that are higher or lower than what is required by the federal government.

As of January 2024, the U.S. Department of Labor (DOL) reports that 30 states pay more than the federal wage floor of $7.25, as well as the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. While the federal government has yet to pass legislation to match a debated $15 rate, many municipalities, such as New York City, have enacted a local minimum wage to account for higher costs of living. Some state legislatures have policies to raise their minimum wages by set amounts at predetermined dates. Florida residents voted in November 2020 to increase the state’s minimum wage incrementally until it reaches $15 per hour in September 2026.

Of the remaining 20 states, 13 have minimum wages equal to the current federal rate. Some state legislatures do not specify an actual dollar amount but have a provision to ensure that their rate always matches the federal minimum wage.

Two states—Wyoming and Georgia—have a minimum wage that is lower than the federal minimum wage, while Alabama, Louisiana, Mississippi, South Carolina, and Tennessee do not have an established minimum wage. In these cases, employers must still pay the federal minimum wage.

Highest and Lowest Wages by State

The highest minimum wage requirements statewide as of January 2024 are within California at $16.00 and the District of Columbia at $17.00. Conversely, at $5.15 per hour, Georgia and Wyoming are the only states with a minimum wage below the federal mark of $7.25.

Despite lower state-approved minimums, federal law dictates that the higher of either the state or federal minimum is legally applicable, which means that the enforceable minimum wage in Georgia and Wyoming is $7.25. Employers cannot pay their nonexempt hourly workers less than the federal mark, so the price floor is still $7.25 per hour.

For states that set a minimum wage above the federal mark, many include contingencies. Arkansas’ minimum wage of $11 applies to employers of four or more employees. Those with three or fewer employers pay at least $7.25 per hour.Minnesota’s highest minimum wage is $10.85 per hour for employees of a “large employer” or an “enterprise with annual revenues of $500,000 or more.” In the case of a “small employer” or an “enterprise with annual revenues of less than $500,000,” the minimum wage is $8.85 per hour.

Minimum Wage Policy

Arguments for and against a minimum wage hike are commonly supported by data limited to individual case studies. Many argue that a federal minimum wage hike would lead to layoffs and a rise in unemployment, increased poverty rates, closures of small businesses, and the price of consumer goods.

Those in favor of an increase cite studies by the Economic Policy Institute that found the real value of the $7.25 minimum wage failed to keep up with inflation and declined more than 17% in its first ten years from 2009 to 2019.The Institute also cites that low wages hurt “black workers and other workers of color,” who already make up a disproportionate share of the severely underpaid.

The Bottom Line

The minimum wage disparities among states show how individuals and legislators view the issue. Some states have raised the minimum wage incrementally or established “tiers” for different business sizes. Many match the existing federal mandate of $7.25 per hour.