The federal minimum wage has stood at $7.25 an hour since July 2009. Given the partisan split between the House and Senate, it seems destined to remain there for the foreseeable future, despite broad public support for raising it. But in some ways, Congress’ deadlock is almost a side issue to the main debate: For the past decade or so, most of the action on minimum wages has been in states, counties and cities. In Virginia, for instance, lawmakers recently approved legislation to raise the commonwealth’s minimum wage, though the Senate and House of Delegates need to reconcile their differing versions.
Virginia is one of 21 states where the $7.25 federal minimum applies. Those states contain about 39% of all U.S. wage and salary workers – roughly 58 million people – according to our analysis of state minimum-wage laws and federal employment data. In the 29 other states and the District of Columbia, minimum wages range from $8.25 (in Nevada, for employers who don’t provide health benefits) to $16.39 (for the largest employers in Seattle).
How we did this
In eight of the states with higher-than-federal minimum wages, some cities and counties have adopted local minimum wage laws that provide for higher rates than the state minimum, accelerate schedules for future increases, or both. Our research found 46 such cities and counties – most of them (32) in the Los Angeles and San Francisco Bay areas of California. A few other cities – Bangor and Portland, Maine; San Diego, California; and Tacoma, Washington – also have local minimum wage laws, but they’ve been overtaken by increases in state rates.
Two states, Oregon and New York, don’t permit localities to adopt their own minimums but have regional variations built into their statewide laws, to account for wide cost-of-living differentials within those states. In Oregon, the “standard” hourly minimum of $11.25 applies, by our estimate, to only about 43% of the state’s nearly 2 million wage and salary workers. The minimum wage is $12.50 for workers in the Portland metro area, the state’s largest and most expensive; in 18 “nonurban” counties, which combined have fewer than 10% of Oregon’s wage and salary workers, the minimum is $11. Scheduled future increases in the three zones (metro Portland, “standard” counties and nonurban counties) also vary based on the cost of living.
New York state has one minimum wage for New York City ($15), one for the city’s suburban counties ($13, rising to $15 by 2021), and one for the rest of the state ($11.80, rising to $12.50 by the end of this year and by an inflation index thereafter until it reaches $15).
The $7.25 federal minimum wage is pretty much one-size-fits-all (or most: tipped employees, students, farmworkers and young trainees can be paid less under certain circumstances). But states, cities and counties can and often do provide for a range of minimums for different types of employers.
Nevada, for instance, matches the federal minimum wage of $7.25 an hour for employers that offer their workers health benefits but mandated $8.25 for employers that don’t. Seattle’s minimum wage is now $16.39 for “large employers” (those with more than 500 employees worldwide) and $15.75 for “small employers” with 500 or fewer employees worldwide; the latter, however, can pay $13.50 if an employee’s tips or company-provided medical benefits equal at least $2.25 an hour.
Most states with higher-than-federal minimums also have acted to automate the process of adjusting the minimum wage, rather than leaving it to year-by-year legislative whim. In seven states, the minimum wage already rises annually based on some sort of inflation or cost-of-living index, with the intent of preserving the minimum wage’s current purchasing power. Ten other states (including D.C.) are raising their minimums on a multiyear schedule, and they’ll begin automatic indexing at some point in the future. In eight states, the minimum is being increased on a multiyear schedule, but will stop upon reaching a set rate. About half of the 46 cities and counties with their own minimum wages also have adopted automatic cost-of-living increases, with most of the rest set to follow suit after currently scheduled increases are phased in.
On the other hand, all but one of the 21 states that use the federal minimum wage (explicitly or by default) also bar their cities and counties from adopting any higher local minimums (Wyoming is the lone exception). Eighteen of those states have specifically preempted local minimum wage laws through state statutes; in two others, New Hampshire and Virginia, the practice is that local governments can only do those things that state law allows them to do, which so far has not included enacting local minimum wages. Seven states that have adopted minimum wages beyond the federal standard also have laws that prevent cities and counties from setting their own local minimums. In addition, while New York state doesn’t explicitly preempt local minimum wages, court rulings dating back to the 1960s have held that the state’s minimum-wage law implicitly does so.
Many of the local preemption statutes are relatively recent. Sixteen of the 25 states with such laws adopted them within the past decade – 11 states where the federal minimum wage applies and five states with higher minimums.