United States: States with Lowest Minimum Wage or No State Minimum Wage

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Currently, 29 states and the District of Columbia have a minimum wage above the federal minimum wage of $7.25 per hour. As common as state minimum wage laws have become, it may come as a surprise that there are five states that have yet to adopt a state minimum wage, namely: Alabama, Louisiana, Mississippi, South Carolina and Tennessee; and more surprisingly New Hampshire, which repealed its state minimum wage law in 2011. These states default to the federal minimum wage as they have no state minimum wage laws in place. Many states and localities have minimum wages that are directly dependent upon the federal minimum wage, for example: The Connecticut minimum wage rate automatically increases to 1/2 of 1 percent above the rate set in the Fair Labor Standards Act if the Federal minimum wage rate equals or becomes higher than the State minimum.

However there are also exceptions to the Federal Fair Labor Standards Act:

  • Missouri, Oklahoma, Texas, Puerto Rico, Utah, and Virginia exclude from coverage any employment that is subject to the Federal Fair Labor Standards Act.
  • Hawaii, Kansas, and Michigan exclude from coverage any employment that is subject to the Federal Fair Labor Standards Act, if the State wage is higher than the Federal wage.
  • The Georgia state minimum wage is $5.15. Employees covered under the federal Fair Labor Standards Act are subject to the federal minimum wage of $7.25, but those not covered under the FLSA may be paid the state minimum wage of $5.15.

Exemptions, U.S. Territories and states with no state minimum wages aside, the U.S. states with the lowest state minimum wages include:

minimum-wage-lowest-states

While the majority of skilled workers in the United States earn over minimum wage, familiarity with the minimum wage paid by states, localities and jurisdictions throughout the U.S. is essential when determining the rate of compensation for a position anywhere in the country. According to the third quarter 2015 Quarterly Market Report for North American metro areas, a Retail Sales Consultant in the technology industry may earn approximately $10.60 per hour in Madison, Wisconsin (an area with a minimum wage of $7.25 per hour). The same position could yield approximately $14.45 per hour for a worker in Chicago, Illinois where the minimum hourly wage is $10 per hour in the City of Chicago and $8.25 per hour in the State of Illinois.

Similarly, more highly skilled positions are indexed by the minimum wage and average wages for similar positions within the area where the worker will be engaged, as well as the worker’s level of experience certification and/or education. An example of a position for which certifications are required is a physical therapist. The pay scale for physical therapists varies by metropolitan area from as much as approximately $40.40 per hour in New York, NY (minimum hourly wage $8.75) and Miami, Florida (minimum hourly wage $8.05) to approximately $35.10 in Atlanta, Georgia (minimum hourly wage $5.15/$7.25) and $36.05 per hour in Louisville, Kentucky (minimum hourly wage $7.75). The proportion by which the skilled positions relate back to the minimum wage for the area may be exponential depending upon the level of education or experience the position requires. This would be true of more highly skilled positions such as supervisors, various types of engineer and executive level positions. With these positions, the ranges between the approximate pays will be greater between the areas with low minimum wages and those with higher minimum wages.