The minimum wage refers to the lowest pay that employers are allowed by law to remunerate their workers. Alternatively, it is the price floor below which no employee can sell their labor to employers. The concept of minimum wages began in New Zealand and Australia in the 1890s. At the time, employers of workers in sweatshops exploited them. The minimum wage was set to ensure low-income earners were treated fairly at work. By the end of the 20th century, most countries had introduced minimum wages. In the United States, the body that sets the minimum wage is the US Labor Law.
The Minimum Wages by US States
The highest minimum wages in the states of America are $11.00 and $11.25 per hour. The states that pay the minimum wage of $11.00 are Massachusetts and Washington. Portland, Oregon’s minimum wages is the highest at $11.25. The states whose minimum wages are $10 include Vermont ($10), the rural counties of Oregon ($10), Non-rural Oregon ($10.25), Connecticut ($10.10), California ($10.50), and Arizona ($10). Alaska ($9.80), Colorado ($9.30), Hawaii ($9.25), Maine ($9.00), Maryland ($9.25), Minnesota ($9.50), Nebraska ($9.00), New York ($9.75), and Rhode Island ($9.60) have minimum wages of $9.These states with high minimum wages are incidentally those whose living standards are very high.
States with very low minimum wages of between $5 and $7 include Wyoming ($5.15), Georgia ($5.15), Utah, Virginia, Wisconsin, Kansas, Texas, Pennsylvania, Oklahoma, North Carolina, Iowa, North Dakota, Indiana, Kentucky, and New Hampshire ($7.25), New Mexico ($7.50), and Missouri ($7.70). There are some states that do not have minimum wages such as Alabama, Louisiana, Mississippi, South Carolina, and Tennessee.
History of the Minimum Wage
For a long time, the US courts refuted the compulsory minimum wage laws especially during the Lochner era. The basis of the lawyers’ arguments at the time was the law precedence in Muller v. Oregon of 1908. During this case, a law on women’s maximum working hours was upheld. The court argued that women needed special attention. The lawyers hoped that this ruling would be extended to the maximum working hours as well. However, this was not the case. In 1933, a minimum wage of $0.25 was passed by the Roosevelt administration. The minimum wage law was finally upheld by the Supreme Court in 1941 through the Fair Labor Standards Act.
Effects of the Minimum Wage
Proponents of the minimum wage believe that it has benefits such as increasing the workers’ standards of living, minimizing poverty levels, boosting morale, reduces poverty, and reduces the inequalities in allocation of wage rates. In essence, the minimum wage is set to prevent exploitation of workers by their employers. The minimum wage helps to regulate economic vices such as the high crime rates. Studies show that an increase in minimum wage decreases the crime rates in a state. It also helps in economic growth due to the increase in wages which translates in increased spending and savings/investment. On the other hand, opponents of minimum wage say it increases unemployment and poverty. It also damages businesses since it increases the salary and wages expenses thereby heightening prices of goods and services.
List of Minimum Wages By State
|37||Oregon||$10.00 (rural counties), $10.25 (non-rural counties), $11.25 (Portland metro)|