President Obama and the Democrats have been pushing to raise the federal minimum wage (currently at $7.25 per hour) for quite some time. However, many states and municipalities already have higher minimum wages than the federal base.
A series of changes took place at the beginning of 2015, raising the total of states that exceed $7.25 per hour to 29. No states are currently at or above the President’s proposed federal minimum wage of $10.10, but several have legislated changes that will reach or exceed that mark within a few years.
Here is a rough breakdown of the minimum wage picture, by state.
- Federal Minimum Wage Applies – The following states have the current federal minimum wage of $7.25 with no scheduled plans to replace it: Idaho, Indiana, Iowa, Kansas, Kentucky, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, Virginia, and Wisconsin, as well as Puerto Rico, Guam, and the U.S. Virgin Islands.
Several states have no minimum wage or minimum wages below the federal standard; therefore, the federal standard takes precedence for all jobs that are covered by the minimum wage laws. Those states are Alabama, Georgia, Louisiana, Mississippi, South Carolina, Tennessee and Wyoming.
- Indexed Minimum Wages – A number of states enacted indexed minimum wages, generally linked to the CPI index or some other measure of the cost of living. In some cases, the index is two-way (potential increase or decrease is possible); others have instituted a cap on the percentage increase (where minimum wage is increased by the CPI value or the capping percentage, whichever is smaller).
The following hourly wages are for 2015. Indexed states include:
- Arizona ($8.05),
- Colorado ($8.23),
- Florida ($8.05),
- Missouri ($7.65),
- Montana ($8.05),
- Nevada ($8.25),
- New Jersey ($8.38),
- Ohio ($8.10),
- Oregon ($9.25),
- South Dakota ($8.50), and
- Washington ($9.47).
- Scheduled Increases – Scheduled increases without current plans for future indexing are headed for:
- Arkansas ($7.50 this year; $8.00 by 2016; and $8.50 by 2017),
- California ($9.00 this year; and $10.00 by 2016),
- Connecticut ($9.15 this year; $9.60 by 2016; and $10.10 by 2017),
- Delaware ($7.75 now; and $8.25 in June 2015), Hawaii ($7.75 this year; $8.50 by 2016; $9.25 by 2017; and $10.10 by 2018),
- Maryland ($8.00 now; $8.25 in July 2015; $8.75 by 2016; $9.25 by 2017; and $10.10 by 2018),
- Massachusetts ($9.00 this year; $10.00 by 2016; $11.00 by 2017),
- Nebraska ($8.00 this year; and $9.00 by 2016),
- New York ($8.75 this year; and $9.00 by 2016), and
- West Virginia ($8.00 this year; and $8.75 by 2016).
- Scheduled Increases Plus Future Indexing – These states include
- Alaska ($7.75 this year; and $8.75 by 2015; $9.75 by 2016, and indexing in 2017),
- the District of Columbia ($9.50 this year; $10.50 by 2015; $11.50 by 2016, and indexing in 2017),
- Michigan ($8.15 this year; $8.50 by 2016; $8.90 by 2017; $9.25 by 2018, and indexing in 2019), and
- Vermont ($9.15 this year; $9.60 by 2016; $10.00 by 2017; $10.50 by 2018, and indexing in 2019).
- Higher Wage, No Scheduled Increases – States that already have a higher minimum than the federal wage standard but with no planned actions include
- Illinois ($8.25),
- Maine ($7.50),
- New Mexico ($7.50), and
- Rhode Island ($9.00).
Check http://www.ncsl.org/research/labor-and-employment/state-minimum-wage-chart.aspx to verify the actual dates during a listed year that the wage changes will take effect. Not all start on January 1st.
Don’t forget to check to see if your city offers a higher minimum wage. Some cities have raised minimum wages beyond state values, including Oakland ($12.25 starting March 2nd, 2015), San Francisco ($12.25 starting May 2015 with eventual raises to $15.00 by June 2018), Chicago ($10.00 by July 2015 increasing to $13.00 by July 2019), and Seattle ($10/$11 based on employer size, raising to $15 by 2022).
Remember that the Fair Labor Standards Act allows some exemptions to the minimum wage, such as workers who are also full-time students or workers who earn tips as part of their compensation. Make sure you fully understand your compensation before you accept that first job.
If you currently make minimum wage, the odds are favorable that you will be getting an increase of some kind in the upcoming months and years, and depending on where you live, they may be almost a given. However, we hope that the minimum wage job you are in is only a temporary step to allow you to get sufficient work experience to secure a job that pays better in the future.