On July 1, twenty states, cities, and counties raised the minimum wage.
Congress has repeatedly failed to raise the federal minimum wage from $7.25 an hour.
Since July 2009, the federal minimum wage in the United States has remained unchanged.
President Joe Biden signed an executive order instituting a $15 minimum for federal contractors in 2021, and this spring called on Congress to increase the minimum for all workers, but efforts in Congress to increase the base salary nationwide have failed.
Those who support lowering the minimum wage argue that the current rate isn't sufficient to live on and puts a family with one breadwinner below the poverty line. However, opponents argue that raising the $15 hourly wage would drive smaller businesses out of business, hurt part-time workers, and reduce employment in a post-pandemic economy.
Thirty states and Washington, DC, have raised minimum wages above $7.25. On July 1, 20 states, cities, and municipalities raised their base wage rates even further.
Here's what you should know about a minimum wage, the argument for and against it, and where employees might see more money this month.
Where has been increased the minimum wage?
CaliforniaThe state's minimum wage for hourly workers has been raised by around two dozen states, counties, and municipalities this year. Businesses with 25 or less employees may pay $14 an hour. As a result of continuing inflation, Governor Gavin Newsom announced the minimum wage will be raised to $15.50 an hour on January 1, 2023.
Several cities and counties have increased their baseline salary starting July 1, 2022.
ConnecticutThe minimum wage in Connecticut increased from $13 to $14 on July 1, as part of a wider plan begun in 2019. The base pay will eventually reach $15 on June 1, 2023.
Hawaii On June 23, Governor David Ige signed legislation increasing Hawaii's minimum wage to $18 by 2028, the country's highest level. Its a gradual increase, from the current $10.10 per hour to $12 per hour, effective October 1, 2022.
- $14 per hour, effective Jan. 1, 2024
- $16 per hour, effective Jan. 1, 2026
- 18 per hour, effective Jan. 1, 2028
Hawaii does not receive annual inflation adjustments, therefore the state legislature would have to take steps to increase it even further.
Illinois In some instances, state, county, and city officials set different wage rates, and employees are paid as much as they want. In January, the Illinois minimum wage rose to $12 an hour, with a $7.20 minimum for tipped workers and a $9.25 minimum for workers under the age of 18.
Cook County, which includes Chicago and Evanston, increased its minimum wage to $13.35 an hour and the minimum for tippers to $7.40 an hour (Illinois base pay will hit $13 on January 1, 2022, then $14 in 2024, and $15 in 2025).
The minimum wage for firms with four to 20 workers has increased from $14 to $14.50 in Chicago, while the base rate for organizations with 21 or more workers has been increased from $15 to $15.40 per hour.
Hawaii's minimum wage is expected to rise to $18 an hour by 2028.
MarylandMontgomery County, a Washington, DC, bedroom community, has increased its minimum wage on July 1.
- Companies with 10 or fewer workers now must pay $14 an hour, up from $13.50.
- Those with 11 to 50 workers must pay $14.50, up from $14 an hour.
- Employers with more than 50 workers must pay $15.65 an hour, up from $15.
MinnesotaThe minimum wage in Minnesota increased to $10.33 an hour for firms with a turnover of more than $500,000, and $8.42 an hour for those under the threshold on January 1, 2022.
Minneapolis increased its minimum wage for businesses with more than 100 workers from $14.25 to $15 an hour on July 1. Businesses with 100 or less employees must increase their minimum wage from $12.50 to $13.50 an hour.
St. Paul has instituted incremental increases. As of July 1, 2017:
- Employers with five or fewer workers are required to pay $10.75 an hour, up from $10. Companies with six to 100 workers must pay $12 an hour, up from $11.
- Employers with between 101 to 10,000 workers must pay $13.50 an hour, up from $12.50.
- Companies with more than 10,000 employees are now required to pay $15 an hour, up from $12.50 an hour.
NevadaThe minimum wage for employees with health insurance has increased from $8.75 an hour to $9.50 an hour. Employees without health insurance have seen their base pay rise from $9.75 to $10.50 an hour.
Nevada's minimum wage will continue to rise in 75 cent increments until 2024, when the minimum wage will be $12 for employees who receive health insurance benefits.
OregonThe state's minimum wage increased on July 1, but how much depends on where you work.
- In the Portland metro area, the $14 minimum wage went up to $14.75 an hour. This also affects what the area calls the , including parts of Clackamas, Multnomah and Washington counties.
- The standard wage increased from $12.75 to $13.50 an hour in regions outside the urban growth boundary, including Benton, Clatsop, Columbia, Deschutes, Hood River, Jackson, Josephine, Lane, Lincoln, Linn, Marion, Polk, Tillamook, Wasco, Yamhill, and parts of Clackamas, Multnomah and Washington counties.
- The wage increased from $12 to $12.50 an hour in non-urban counties including Baker, Coos, Crook, Curry, Douglas, Gilliam, Grant, Harney, Jefferson, Klamath, Lake, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa and Wheeler.
These rates will be in place until the 30th of June, 2023. After that, the state's baseline wage will be adjusted annually based on the Consumer Price Index.
Washington, DC The nation's capital increased its minimum wage on July 1st from $15.20 to $16.10 an hour as a result of the 2016 Fair Shot Minimum Wage Amendment Act.
The minimum wage for tipped workers has increased to $5.35 an hour.
The minimum wage in DC is linked to the 12-month percentage change in the Consumer Price Index for All Urban Consumers in the DC area.
How many US workers earn minimum wages?
According to the Bureau of Labor Statistics, 1.6 million Americans, or roughly 1% of the US workforce, earned the federal minimum wage or less in 2019.
More than half of respondents worked part-time, with most of them between the ages of 16 and 25, and more than 60% worked in the food service or hospitality industries, where tips often compensate for lower wages.
Is there any case for raising the federal minimum wage?
The minimum wage maintained stable inflation and increased in line with productivity advancement until 1968. If that were the case, the minimum wage would be about $21.50 an hour, equivalent to an annual salary of roughly $44,000.
A minimum-wage worker earns $15,080 per year, not far above the federal poverty limit of $12,800. Although 30 states and the District of Columbia have minimum wages above the federal baseline, 20 states mostly in the South and Midwest still follow the $7.25 rule.
According to a Monmouth University poll conducted in March 2021, 53% of Americans support raising the minimum wage to $15 an hour, while 45% oppose it, with 2% remaining undecided.
What are the arguments for increasing the federal minimum wage?
The Chamber of Commerce of the United States testified before Congress in February 2021 that entry-level employment are required for workers to rise the professional ladder.
According to the chamber, if people cannot climb up the ladder because the minimum wage cuts off the first rung, they may be prevented from obtaining larger and better positions.
The organization argued that while $15 an hour might seem low from the perspective of New York City, Washington, DC, or San Francisco, it was out of line with entry-level earnings in many other areas of the country that have lower living costs.
According to a projection from the Congressional Budget Office for 2021, incrementally increasing the federal minimum wage to $15 an hour by 2025 would benefit 17 million workers, but it would also decrease employment by 1.4 million and increase the federal deficit by $54 billion over the next ten years.