The federal minimum of $7.25 has not changed since 2009, but several states have taken initiatives of their own. Arizona voters raised the state minimum wage to $11 in a 2016 ballot initiative that took effect this year. But a state lawmaker recently introduced House Bill 2523, which would require employers to pay only the federal minimum wage to workers age 22 and under, and who are in college full-time. Meanwhile Maryland is about to join several states that currently have a $15 minimum wage. The state’s House of Delegates approved a bill this week to raise its minimum wage.
Americans earning minimum wage or lower (as some states permit for certain types of exempt work) made up only 2.3% of the total workforce in 2017, according to the Bureau of Labor Statistics. This number is far below the 13.4% of U.S. workers who earned minimum wage in 1979, the first year data were collected related to the subject. About half of minimum wage workers in 2017 were under the age of 25, with 60% of them working in the hospitality and restaurant industries.
Poverty is defined as a family of four earning $25,100 or less in 2018. Thus a family with one bread winner earning minimum wage would be far below the poverty line. That's why several states seeking to address the poverty maintain a minimum wage above federal guidelines. But a higher minimum wage does not necessarily mean a livable wage.
California has a state-level minimum wage of $12. But those with office desks in San Francisco enjoy a $15 minimum wage due to a city mandate that took effect in July off 2018. Several other Bay Area cities have a minimum wage higher than the state wage, including Oakland ($13.80), Palo Alto ($15), and San Jose ($15).
Despite the effort by San Francisco legislators, the $15 per hour minimum wage is still not a livable wage in the city. The median rent for a one-bedroom apartment in the city is $3,460 per month, nearly three times the national average, according to the Council form Community and Economic Research. The overall cost of living in San Francisco is 63% higher than the national average.
Parking is another expense that makes makes San Francisco so expensive. While free parking is available outside the city center, regular downtown parking costs upwards of $400 per month. That's why many workers in San Francisco use the BART train at about $70 for a monthly pass.
There are currently 29 states with minimum wages higher than the federal wage of $7.25. That means 21 states pay the federal minimum wage, and some even lower. Georgia, for instance, allows a lower minimum wage for employees that are exempt from the Fair Labor Standards Act. This includes workers that receive tips ($2.13), employees under age 20 and in training for the first 90 days ($4.25), and full-time students working under 20 hours per week ($6.16).
Wyoming has similar laws to Georgia, with the same $4.25 training wage for young workers and the $6.16 wage for full-time students. Several southern states, including Louisiana and Mississippi, do not have state-level minimum wage laws at all. This is due to a southern strategy that was supposed to attract companies to the region after the 1930s when the federal minimum wage first took effect in the late 1930s.
Washington D.C. currently has the highest state (territorial)-level minimum wage, at $13.25 per hour.
When adjusted for inflation (2018 dollars), the highest federal minimum wage was $11.79 in 1968. The National Employment Labor Project said in 2012 that if wages kept pace with economic growth and inflation, it should have been $21.16 that year.
A $20-plus minimum wage if of course politically unrealistic. That's why higher education and obtaining specialized skills is more important than ever.