Making Minimum Wage


by Rachel Vilsack

Last session the Minnesota Legislature debated on whether to raise the minimum wage. The session closed with the House approving a bill that would raise the wage to $9.50 an hour by 2015. A similar bill is expected to be debated in the 2014 legislative session. Let’s take a closer look at who makes minimum wage in Minnesota.

Minimum Wage Laws

moneyThe federal minimum wage was established in 1938 and set at 25 cents per hour, as a way to raise the earnings of low-wage workers following the Great Depression. From its initial 25 cents per hour, the federal minimum has been raised a few dozen times. It stood at $5.15 from 1997 to 2007, and was raised to its current level of $7.25 in 2009.

Did you know that minimum wage laws vary by state? Congress gave states the power to set their own minimum wage above the federal level.  In fact, January 1st of this year saw an increase in the minimum wage in 13 states across the country. Currently, 21 states (and the District of Columbia) have higher state minimum wages. At $9.32 per hour, Washington has the highest minimum wage among states. (The California state minimum wage will increase again to $10 per hour effective January 1, 2016.) Four states, including Minnesota, have minimum wages lower than the federal standard. However, federal minimum wage laws supersede state laws in most cases.

Minimum Wage Workers in Minnesota

According to a 2012 Minnesota Department of Labor and Industry report (pdf) on minimum wage:

  • Minimum wage workers are more likely to work part-time; 72 percent of all minimum-wage workers worked part-time.
  • Among hourly workers, seven percent of women earned the minimum wage or less, compared to five percent of men.
  • The occupation with the most minimum wage workers was food preparation and serving workers. 
  • Those without a high school diploma made up 31 percent of all hourly workers at or below the minimum wage.
  • Minimum wage workers are younger; 60 percent of all hourly workers paid the minimum or less were 15 to 24 years old.

In total, there are about 101,000 jobs paying at or below $7.25 per hour, or 3.5 percent of all jobs in Minnesota in an average quarter in 2012.

For more information about wage laws in Minnesota, visit the Labor Standards Office at the Minnesota Department of Labor and Industry.

 

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