• As of April 2013, the federal minimum wage in the United States is $7.25 per hour. This means that employers operating in the U.S. are not allowed to pay their workers less than $7.25 for every hour they work.
     
    There are some complications, however! Minimum wages are actually set by individual states, territories, and cities. 
     
    Many of these regions set their minimum wages higher than the federal minimum wage. The highest minimum wage in the country is offered by the city of San Francisco, California, where workers are paid at least $10.55/hour. Washington has the highest minimum wage among states, at $9.19/hour. 
     
    States can also set their minimum wages lower than the federal minimum wage. Some states, such as Louisiana, have no official minimum wage at all. 
     
    In regions where the state or municipal minimum wage differs from the federal minimum wage, the higher wage always applies. So, the minimum wage employers in Louisiana are legally permitted to pay workers is $7.25/hour. The minimum wage employers in Washington are legally permitted to pay workers is $9.19/hour. The minimum wage employers in San Francisco are legally permitted to pay workers is $10.55/hour.
    • The sector with the most minimum wage workers in the U.S. is “Leisure and Hospitality,” which includes the fast-food industry.
    • In no state can a minimum-wage worker afford to rent an affordable two-bedroom unit working the standard 40 hours a week. (“Affordable” means that no more than 30% of a worker’s income is spent on rent.) To afford a two-bedroom apartment, a minimum-wage worker in Arkansas or West Virginia would need to work 63 hours a week. In Hawaii, a minimum wage worker would have to work 175 hours a week. (There are 168 hours in a week.)
    • Women are more likely than men to earn the minimum wage. About 6% of women earning an hourly wage in the U.S. earn the minimum wage, while about 3.4% of men do.
    • The purchasing power of the federal minimum wage is sometimes called the “real minimum wage.” The purchasing power of the federal minimum wage was highest in 1968, when the $1.60/hour minimum wage had a “real” value of $10.57/hour.
    • As of March 2013, 284,000 college graduates, including 37,000 with advanced degrees, have minimum wage jobs in the United States.
    • Nations take different approaches to the minimum wage. Nations with the highest minimum wages (expressed in American dollars) are Luxembourg ($10.40/hour), France ($10.20/hour), Australia ($9.80/hour), Belgium ($9.50/hour), and the Netherlands ($9.20/hour). Some nations, such as Germany, do not have a federal minimum wage at all. In Germany, labor unions and employers negotiate different minimum wage standards for each industry.
  • Term Part of Speech Definition Encyclopedic Entry
    employer Noun

    person or organization that hires people for wages and salaries.

    federal Adjective

    having to do with a nation's government (as opposed to local or regional government).

    minimum wage Noun

    least amount of money an employer is allowed to pay by law.

    tip Noun

    money or other compensation, in addition to general wages, offered directly to a person for performing a service. Also called a gratuity.

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