Minimum Wage Facts
As of May 2010, the federal minimum wage is $7.25, which was set in July 2009 with a 70 cents increase from $6.55 minimum federal wage set in July 2008. A federal standard that dates back to 1938, minimum wage is not set from year to year, but rather as Congress dictates, most recently with the Federal Labor Standards Act.
State legislatures also can set minimum wage standards.
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First Minimum Wage
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According to the website Labor Law Center, the first United States' federal minimum wage was enacted in 1938 at 25 cents per hour. By 2010, the wage had increased by seven dollars, or $7.25, but inflation dictates the dollar's true worth from year to year.
2007, 2008 and 2009
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In the years 2007, 2008 and 2009, July 27 of each year marked a raise in the federal minimum wage, as dictated by the Fair Labor Standards Act, (FLSA) to $5.85, $6.55 and $7.25, respectively. The 2009 raise completed the third and final raise in the three-part increase FLSA initiative. The largest change from year to year in real dollars occurred during this period, with 70 cents raised each year.
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High Times
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Prior to the 70-cent jump in 2007, the largest year-to-year increase in real dollars occurred between 1990 and 1991 with a 45-cent jump from $4.75 to $5.15. Previously, year-to-year raises ranged from a 40-cent raise in 1997; 25 cents in 1979 and 1981; 20 cents in 1968, 1976 and 1980; 10 cents in 1975; and five cents in 1939. There has never been a decrease in the dollar amount from year to year.
Slumps
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From 1997 to July 2007, the federal minimum wage remained $5.15 per hour. In July 2007, it was raised 70 cents to $5.85 per hour, and as mandated by the FLSA, would raise another 70 cents in 2008 and 2009. Prior to this decade-long slump, the longest period without change occurred between 1981, at $3.35 per hour, to 1990, at $3.80 wage, a difference of 45 cents after a period of nine years.
State Compliance
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According to the Department of Labor website, states can use the federal minimum wage or set their own wage that is higher. As of May 2010, states with no minimum wage or a wage that is equal to the federal minimum wage were in the majority, with 31 of the 50 states complying to the federal standard. Five states had lower minimum standards than the federal rate of $7.25, including Georgia and Wyoming ($5.15); Minnesota ($6.15); Arkansas ($6.25) and Colorado ($7.24). According to the U.S. Department of Labor, federal minimum wage standards supersede state law when the state minimum is lower than the federal wage. States are free to set a minimum higher than the national minimum, however.
Fourteen states had a state minimum wage that was higher than the federal $7.25 rate as of May 2010. These included Washington ($8.55); Oregon ($8.40); Connecticut ($8.25); Vermont ($8.06); California, Massachusetts and Illinois ($8.00); Alaska ($7.75); Nevada ($7.55); Maine ($7.50); New Mexico ($7.50); Michigan and Rhode Island ($7.40) and Ohio ($7.30).
American Territories
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The District of Columbia has an $8.25 per hour state minimum wage, while American Samoa does not assign a state rate, and must comply to the federal standard. Guam and the Virgin Islands have a $7.25 state minimum wage, and Puerto Rico's state minimum wage is $4.10.
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References
- Photo Credit dispute for the money image by ktsdesign from Fotolia.com
