What Is the Minimum Wage?

Advertiser disclosure You're our first priority. Everytime. We believe that every person should be able to make sound financial decisions with confidence. And while our site doesn't feature every company or financial product available in the marketplace however, we're confident that the guidance we offer as well as the advice we offer and the tools we develop are objective, independent easy to use and free. So how do we earn money? Our partners pay us. This may influence which products we review and write about (and where those products appear on the site) However, it in no way affects our recommendations or advice that are based on hundreds of hours of study. Our partners are not able to be paid to ensure positive reviews of their products or services. .

What is the minimum wage?
Minimum wages, tipped minimums median wages, and pay gaps are different by state.
Written by Anna Helhoski Senior Writer | Consumer finance, economic news, trends, debt for students loan and debt Anna Helhoski is a senior writer who writes about economic news and trends in consumer finance for NerdWallet. Additionally, she is an expert for student loans. Her work was published by NerdWallet as of the year 2014. Her work was featured on The Associated Press, The New York Times, The Washington Post and USA Today. She previously covered local news from The New York metro area for the Daily Voice and New York state politics for The Legislative Gazette. She holds a bachelor's degree in journalism from Purchase College, State University of New York.





Jan . 23, 2023


Written by Rick VanderKnyff Senior Assigning Editor | Los Angeles Times; University of California, San Diego; Microsoft Rick VanderKnyff leads NerdWallet's efforts to promote news, and also manages the team that is responsible in expanding NerdWallet content to include additional topics that relate to personal finance.

Previously, he has worked as a channel supervisor at MSN.com and as a web manager at University of California San Diego, and as a copy editor and staff writer for The Los Angeles Times. He holds a Bachelor of Arts in communications and a Masters of Arts in anthropology.







Many or all of the products we feature come from our partners who compensate us. This influences which products we write about as well as the place and way the product appears on a page. But, it doesn't influence our evaluations. Our opinions are our own. Here's a list and .



Show More


The federal minimum wage of $7.25 per hour hasn't changed since 2009, despite an increase in the cost of living which has accelerated into skyrocketing inflation over the past year.
Thirty states and Washington, D.C., have minimum wage rates that are higher than the federal minimum wage.
Minimum wage over time
The minimum wage hasn't kept pace with inflation when looking at the nominal wage (not adjusted to inflation) versus their spending power in 2022 numbers (adjusted for inflation).
Since the minimum wage in the federal government has not changed since 2009, its actual purchasing power has decreased dramatically. A decrease in purchasing power makes it harder for workers to live on a minimum wage.
State minimum wages
The minimum wage varies by state. Five states have no minimum wage law, but the federal minimum wage still is applicable to them. They are Alabama, Louisiana, Mississippi, South Carolina and Tennessee. In certain states there is a minimum wage that is higher, contingent on whether a particular city or region within that state has the higher minimum wage.
Does raising the minimum wage cause inflation?
No. The federal minimum wage is set by the federal government and does not directly correspond with inflation. The current situation of inflation was not due to this minimum wage. It hasn't changed since 2009.
Do all workers earn at least the minimum wage?
All workers covered under the Fair Labor Standards Act must be paid at least the federal minimum wage, and could earn more when the state's minimum wage is greater.
As per the Department of Labor, workers not covered by the FLSA who earn less than minimum wage, include:
Workers of certain amusement parks or recreational establishments.
Newspaper employees of tiny newspapers as well as newspaper delivery staff.
Seamen who work on foreign vessels, or those involved in fishing activities.
Certain farmworkers.
Casual babysitters.
Companions to older individuals or those with disabilities.
Professional, administrative, and executive employees.

Those workers are also exempt from overtime payments. (Learn more about who is -- and who isn't eligible for overtime pay by visiting the .)
Does the minimum wage count tips?
The employees who are tipped depend on tips from customers to increase their income. The average tipped employee receives more than $30 in monthly tips, according to the Department of Labor.
The employees who receive tips must earn a basic wage that is $2.13 an hour. This is also known as cash wage. The cash wage is then paired with tips in order to meet the minimum wage in the federal government which is $7.25 per hour. These tips are referred to as a "tip credit," that allows companies to compensate employees below the federal minimum wage.
Employers may give up to $5.12 per hour in tips against a worker's earnings. If an employee's earnings (at minimum $2.13 an hour) plus tips is less than $7.25 per hour, the employer is required to the difference.
Minimum tipped wages and maximum tip credits differ by city and state.
Washington, D.C., has the most tipped workers' minimum wage of all workers in the United States. At the time of the 2022 elections, Washington, D.C. residents voted to increase incrementally their minimum wages to workers who are tipped each year until July 1st, 2027. After that, the tipped minimum will be adjusted to match the same minimum as the nontipped minimum wage that year. The current minimum wage is $5.35 per hour for workers who are tipped and $16.10 to nontipped employees.
State-mandated minimum wage is tipped.
Which states are increasing their minimum wages?
Each every year, fourteen states plus Washington, D.C., automatically increase the minimum wage in accordance with the rate of inflation, usually tied with the U.S. Bureau of Labor Statistics', or CPI. If the CPI doesn't change, neither will the wage. And some states have annual caps on inflation increases. These include California (3.5%), Minnesota (2.5%) and Vermont (5%).
States that tie minimum wage increases to inflation adjust their salaries as of January. 1, unless listed, according to the . The states that do this include:
Alaska.
Arizona.
California.
Colorado.
District of Columbia (adjusts July 1).
Maine.
Minnesota.
Montana.
New Jersey.
New York (adjusts Dec. 31).
Ohio.
Oregon (adjusts the 1st of July).
South Dakota.
Vermont.
Washington.

Connecticut is scheduled to index wages to inflation beginning January. 1, 2024.
Increases in minimum wage
What is the median household income in the U.S.?
Median household earnings of a single person is $70,784, as per data from the latest U.S. Census Bureau population survey data for 2021.
Median incomes for the states.
>> MORE:
What is the gender pay gap?
Women typically earn less money than men: In 2020 females earned just 83 cents on each dollar earned by men, as per Census Bureau. Census Bureau.
For women and men who were employed full-time, all year round in 2019 (the most recent data from the Census Bureau's American Community Survey), the national median earnings wage difference was $10,150 and men earned an average of $53,544 and women earning a median wage of $43,394.
The wage gap is widening when you look at every state. The states with the largest mean wage disparity between males and females are:
Wyoming: $21,676.
Utah: $17,303.
District of Columbia: $16,032.
Louisiana: $14,926.
Washington: $14,609.

The states that have the smallest average wage gaps between men and women are:
Vermont: $4,600.
Nevada: $6,013.
Hawaii: $7,022.
California: $7,162.
Maryland: $7,594.

Which is the most significant gender pay gap in your area?
A gender pay gap also exists for women at lower levels of education. For those with less than an associate's degree women earned 66 cents for every dollar earned by men according to the U.S. Government Accountability Office.
Here are the most current median earnings differences by degree, according to race and gender, which was compiled from the National Center for Education Statistics.
Gender



Associate degree median earnings



Bachelor's degree median earnings



Median earnings of master's degrees



Men


$48,390.


$63,950.


$84,010.


Women


$34,780.


$50,000.


$60,930.








Race



Associate degree median earnings



Bachelor's degree median earnings



Median earnings for master's degrees



Asian


$39,130.


$59,910.


$85,000.


Black


$35,850.


$44,300.


$53,540.


Hispanic


$38,890.


$45,160.


$59,370.


White


$44,500.


$59,600.


$69,560.








How do you define the race-based wage disparity?
Inequality in wages are evident when they are broken down according to races or ethnicity Department of Labor data illustrates. When you look at the amount made from white employees:
Latino/Hispanic workers make 73 cents.
Black workers earn an average of 76 cents.
Native American Indians earn 77 cents.
Multiracial workers make the equivalent of 81 cents.
Asian-Pacific Islander workers earn $1.12.

What is the gender-based racial wage gap?
The gender pay gap is exacerbated further due to the racial wage disparity, according to data by the Government Accountability Office. When you consider every dollar earned by white men:
Latina/Hispanic women earn an average of 58 cents.
Black women make the equivalent of 63 cents.
White women earn 79 cents.
Asian women earn 97 cents.

What is this LGBTQ+ gender or gender gap in pay?
Gender and gender identity among LGBTQ+ workers also tends to influence earnings, according to an analysis of 2021 pay data from The Human Rights Campaign. LGBTQ+ workers typically earn 90 cents per dollar that a typical worker earns (as infull-time, full-time private and public sector nonfarm workers). According to the Human Rights Campaign data, when compared to every dollar made by the average worker:
Men in that LGBTQ+ community make the equivalent of 96 cents.
Women in those in the LGBTQ+ community earn 87 cents.
The gender fluid, nonbinary, genderqueer and two-spirit workers make 70 cents.
Transmen earn 70 cents.
Trans women make 60 cents.



Author bios: Anna Helhoski is a writer and is NerdWallet's chief authority in the field of student loans. Her work has appeared in The Associated Press, The New York Times, The Washington Post and USA Today.







On a similar note...








Dive even deeper in Personal Finance
















Make all the right money moves

If you cherished this report and you would like to obtain extra information concerning $255 payday loans online same day california no credit check (creditada.site) kindly stop by the internet site.