$7.25 of pay keeps the FLSA away

$7.25 of pay keeps the FLSA away
as suggested by Meaulnes Kenwood
FRED Blog, August 8, 2016



In 1938, the U.S. federal government passed the Fair Labor Standards Act, establishing a federal minimum wage of $0.25 per hour. Today, the federal minimum wage stands at $7.25 per hour. The FLSA doesn’t cover all workers, but it does cover those who meet certain criteria, such as those who work for businesses with annual sales or business conducted of at least $500,000. It covers those who work for hospitals and other medical or nursing care providers, schools, and government agencies. Domestic service workers and those involved in interstate commerce are covered as well.

A state minimum wage law applies to all residents within a state. If a worker isn’t covered under FLSA, they’ll receive the state minimum wage. If a worker is covered by both FLSA and state legislation, they’re generally paid the higher wage. These state standards differ across the country. Some states have no minimum wage. Some states, such as Washington, adjust their minimum wage annually according to changes in price levels.

The maps show changes in state minimum wages between 1985 (top map) and 2016 (bottom map). California and Massachusetts have the highest wage, at $10 per hour; Oregon and Connecticut also have comparatively high wages, at $9.25 and $9.60, respectively. A cluster of states, including Mississippi and Alabama, do not have a state minimum wage. In these states, if a worker meets FLSA criteria, they’re paid $7.25. If not, they’re paid whatever wage they negotiate with their employer. Finally, some states have lower minimum wages: Wyoming, for example, sets its minimum wage at $5.15, less than the FLSA rate. But one trend is consistent: Over time, the minimum wage has increased across the United States.

Many factors can contribute to the rate a state chooses to set. States’ labor forces and economies vary dramatically, so naturally the minimum wage can vary as well. Some regions, such as New England and the West Coast, have higher costs of living, which is a likely reason for higher minimum wages.

How these maps were created: From the GeoFRED site, click the “Build a new map” button at the top right. After a world map appears, use the tab on the left to customize the map. Select “State” for the region type and search for “State minimum wage rate” in the data section. To create maps for different time periods, select different years under the “Dates” section.

Suggested by Meaulnes Kenwood.

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