"The real minimum wage is zero."
-- Thomas Sowell
Economist Thomas Sowell may technically be right, but a wage of zero would attract few job applicants and would not support any workers very well. Thus, employers have to offer more than zero. Beyond that, though, there's disagreement among economists, politicians, and everyday Americans as to whether companies should be able to pay what they choose to pay or be subject to offering at least a specified minimum wage.
Image source: Getty Images.
Those in favor of a minimum wage argue that without it, many employers would not offer wages that can sustain workers, often leading many to require assistance through government programs. Those against it argue that jobs would be lost because many employers couldn't afford to pay minimum wages. Here's a look at how the federal minimum wage has changed over time, from its beginning at $0.25 per hour in 1938 to its current level of $7.25 per hour, as of 2009. Here's a look at the history of our national minimum wage since 1978, followed by a review of the six states that, along with the District of Columbia, sport minimums of $10 or more per hour:
|
As Of: |
Minimum Wage Per Hour |
Increase Over Previous Minimum |
|---|---|---|
|
1978 |
$2.65 |
|
|
1979 |
$2.90 |
9.4% |
|
1980 |
$3.10 |
6.9% |
|
1981 |
$3.35 |
8.1% |
|
1990 |
$3.80 |
13.4% |
|
1991 |
$4.25 |
11.8% |
|
1996 |
$4.75 |
11.8% |
|
1997 |
$5.15 |
8.4% |
|
2007 |
$5.85 |
13.6% |
|
2008 |
$6.55 |
12% |
|
2009 |
$7.25 |
10.7% |
Data source: Department of Labor and author calculations.
Beacon Hill, Boston. Image source: Getty Images.
Massachusetts: $11.00 per hour
Massachusetts is a rather expensive place to live, with a median home value recently near $245,000, according to Zillow, which is well above the national median of about $200,000. (It's far higher in some areas -- Boston, for example, sports a median value of $648,000.) Its minimum wage has been rising in recent years, jumping from $10 per hour to $11 at the beginning of this year, in the last of three scheduled increases mandated in 2014. There's talk of further increases, too, with a 2018 ballot question proposed calling for four incremental $1-per-hour increases each year from 2019 to 2022, culminating in a $15-per-hour minimum wage.
Seattle. Image source: Getty Images.
Washington: $11.00 per hour
The median home value in Washington state, according to Zillow, was recently $195,000, a bit below the national median value -- but some parts of the state, such as Seattle, at $462,000, sport far higher values. Clearly, many urban Washingtonians would struggle financially if they earned the federal hourly minimum wage of $7.25 -- and many would struggle with $11 per hour, too, but the city of Seattle set in motion a gradual increase in its minimum to $15 per hour by 2021.The state minimum is set to increase further, as well, reaching $13.50 by 2020. Already, there have been conflicting studies about the effects of the increases, citing job losses or the absence of job losses. It's still a bit early to draw firm conclusions, though.
Big Sur, California. Image source: Getty Images.
California: $10.50 per hour
California is another state with an incremental ongoing increase in its minimum wage -- in its case, up to $15 by 2023. The state's minimum is currently at $10.50 for workplaces with 26 or more workers and $10.00 at workplaces with 25 or fewer, and it's set to rise, respectively, to $11.00 and $10.50 for each group on January 1. California's law allows for pauses in the progress when the economy is not strong, so annual increases are not quite a sure thing. It, too, is a state with some hefty real estate values. Its median home value, according to Zillow, was recently around $295,000, almost 50% higher than the national median of $200,400. Some cities, of course, sport far higher medians, such as Los Angeles, at $473,000, and San Francisco at a whopping $1 million. Los Angeles has its own minimum wage, which is moving toward $15 at a faster clip, recently rising to $12.00 per hour from $10.50.
Image source: Getty Images.
Connecticut: $10.10 per hour
Connecticut's median home value, according to Zillow, is a bit below the national median, at $171,000 versus $200,400. Its minimum wage is above average, though, rising to $10.10 this past January in the third of three steps. It rose from $8.70 to $9.15 in 2015 and to $9.60 in 2016. Further increases in the near future are very possible, as several dozen state lawmakers have proposed further increases to bring the minimum to $15 per hour.
Image source: Getty Images.
Arizona: $10.00 per hour
In general, Arizona is a less costly state in which to live than many of the previous states -- with a recent median home value, according to Zillow, of $142,000, considerably lower than the national median of $200,400. Still, the state has a minimum wage well above the national minimum, rising 24% from $8.05 to $10 per hour at the beginning of 2017 and set to continue rising incrementally to $12 per hour by 2020. As you might expect, the move to increase the wage wasn't unanimous and there was even a late legal push by business interests to stop the increase, but that was rebuffed, with the increase allowed to take effect.
Image source: Getty Images.
Oregon: $10.00-$11.25 per hour
Oregon's minimum wage is a fresh one, having been implemented on July 1. It also has an interesting twist: It's tied to geography. Throughout most of the state, the minimum wage was hiked to a "standard" $10.25 this summer. But in the urban Portland metropolitan area, where the cost of living is higher, it's $11.25, and in several "nonurban" counties, it's $10.00. The standard rate is scheduled to keep rising annually, hitting $13.50 in 2022, while the Portland-area minimum will become $14.75 and the nonurban minimum $12.50. After that, rates will be adjusted for inflation. Oregon's median home value, according to Zillow, was recently a whopping $311,600 -- well above the national median of $200,400. In Portland, it was $390,500.
Montpelier, Vermont. Image source: Getty Images.
Vermont: $10.00 per hour
Many of these high-wage states passed their wage legislations in 2014, and Vermont is no exception. Its minimum wage rose from $8.73 per hour to $9.60 in 2016 and to the current $10 per hour in 2017. It's set to reach $10.50 in 2018 and to continue rising in the future, indexed to keep pace with inflation. Vermont Democrats have been pushing for an eventual $15-per-hour minimum, getting pay levels up sooner than the existing law would do. Meanwhile, the minimum wage for tipped workers in Vermont also rose this year -- to $5.00 per hour. Tipped workers generally earn far lower hourly wages, with the expectation that the difference will be made up by tips. In some states, tipped workers earn as little as $2.13 per hour.
