Minimum wage in America: How many people are earning $7 25 an hour?

How does the minimum wage work

Bo Peery edited it, and Maria Aquino integrated it into CBO’s website and prepared it for release. The underlying data are based on CBO’s February 2023 economic forecast, which was developed by the agency’s Macroeconomic Analysis Division. In CBO’s assessment, there is a two-thirds chance that the effects of the policy option would be within this range. Kamala Harris, as president of the Senate and the final arbiter on the chamber’s rules, has the authority to overrule the parliamentarian. But such a power has not been wielded since Nelson Rockefeller in 1975, and, besides, the White House has indicated that the vice-president will not take that route. USAFacts is a not-for-profit, nonpartisan civic initiative making government data easy for all Americans to access and understand.

Certain categories of workers are exempt from being covered by minimum wage laws. Cities and municipalities within a state may set a higher minimum wage for residents who live in areas with higher costs of living. The city of Chicago has had a minimum wage of $15 or $15.80, depending on employer size, as of July 2023. Seven states have no state minimum and two, Georgia and Wyoming, have a minimum wage less than that provided for at the federal level.

How is minimum wage different from living wage?

Several states attempted to pass minimum wage laws but they were rebuffed by a 1923 Supreme Court decision that declared minimum wage laws to be unconstitutional. The first minimum wage laws came into effect in the late 1800s when sweatshop labor was common in newly industrialized countries. Minimum wages were a central demand minimum wages for the new union movement, along with shorter hours and better working conditions. The first minimum wage law in the United States went into effect in 1912 when Massachusetts set a minimum hourly rate for women and children under age 18. Effective January 1, 2024, the minimum wage is $16.00 per hour for all employers.

How does the minimum wage work

Economic conditions such as the state of the economy may call for adjusted labor market dynamics. Regardless of the consideration, there are various reasons to support and detract from raising the minimum wage. Black or African American women and white women have the highest rate of employees earning at or below federal minimum wage, at 1.8% of hourly workers. The least likely of all genders and races to make the minimum or below are white men, at 0.7%.

Understanding the Minimum Wage

For those reasons, in this interactive tool, a minimum-wage increase generally causes a net reduction in average family income. As 2024 ushers in notable minimum wage increases, it’s clear this is more than just a regulatory update. It represents a profound shift in how we value work and compensate workers. These changes are a beacon for businesses to not just adjust financially, but to also embrace a future where fair pay is key to thriving.

  • We are in the process of adding data at the state and local level.
  • Take Florida – the state voted for Trump in November, but it also backed by 60% a ballot initiative raising the minimum wage to $15 over the next five years.
  • CBO did not examine those other possible outcomes in this analysis.
  • Yet the pay hike, which went into effect on April 1, is sparking furious debate, with some restaurant owners warning of job losses and higher prices for customers, while labor advocates tout the benefits of higher wages.
  • As with the regular minimum wage, increases in the subminimum hourly wage would occur in July of each year.

This is the absolute minimum that any worker (except those in exempt categories) should be paid by their employer in the United States. This is used across the country and accepted as the minimum an employee can be paid. So, it will override any laws state by state that may not have been reviewed for some time and show a lower minimum wage. Minimum wages were advocated by both labor organizers and consumer groups in the United States but they faced challenges from business interests.