Last week, California Governor Jerry Brown signed a bill that will increase the state’s minimum wage to $9 on July 1, 2014, and $10 at the beginning of 2016. (The state’s current minimum wage is $8.) So far, three other states have passed minimum wage increases that will take effect in 2014: Connecticut’s wage will increase to $8.70 for 2014, then $9 for 2015; New York’s wage will increase to $8 at the end of this year, then $8.75 at the end of 2014, then $9 at the end of 2015; and Rhode Island’s minimum will hit $8 at the beginning of 2014. (Nolo has minimum wage information for all 50 states and the District of Columbia at our Wage & Hour page.)
The federal minimum wage, currently $7.25 an hour, is now lower than the minimum wage in more than a third of the states. About half of the states have the same minimum wage as the federal government, and a handful of states either have a lower minimum wage or have no minimum wage at all. As a practical matter, this final group of states also uses the federal minimum wage. The federal wage rate is a floor, not a ceiling. States are free to adopt a higher minimum wage, and employers within the state must pay the higher rate. But in states with a lower minimum wage, employers must generally comply with the federal law unless they are so small and local as to not be subject to the Fair Labor Standards Act.
States generally adopt higher minimum wage rates to try to bring wages into line with the cost of living. But, according to the Center for Poverty Research at U.C. Davis, the federal minimum wage is not cutting the mustard. A full-time employee who works 40 hours a week for a full year, without taking a single unpaid day off, earns about $15,000 annually, just a few thousand dollars above the poverty level for a single person (and well below the poverty level for a family with one or more children).
President Obama has called for an increase in the federal minimum wage to $9; he also appointed a Secretary of Labor, Thomas Perez, who supports raising the minimum wage. However, based on the current climate in Congress (which today is on the verge of shutting the government down), it doesn’t seem likely that a federal wage increase will happen any time soon. And that means the real action will remain at the state and local level.