Minimum Wages in USA 2024: State-wise Comparison

The minimum wages in USA or the basic salary is the minimum wage per hour that a worker has to be paid, as authorised by the federal law of a country. 

The minimum wages in USA is a legally binding price on hourly wages, below which workers cannot be offered a job. 

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The federal minimum wages in USA is $7.25 (~₹599) per hour. However, the basic salary in the United States varies from state to state. 

Washington has the highest minimum wage in USA, which is $15.74 (~₹1,301), followed by California with $15.50 (~₹1,281) per hour. 

Latest Updates on Minimum Wages in USA

The federal minimum wages in USA was declared in 2009 and has not changed since then. However, the state minimum wages in USA have changed at various points. 

Given below are the latest updates regarding minimum wages in USA.

• Several states of the USA have passed legislation to achieve a minimum wage of $15 (~₹1,240)  in 2023 and beyond. Some of the states are New Jersey ( by 2024), Maryland (by 2025) and Florida (by 2026).

• More than 20 states have announced an increase in the minimum wage in 2023, including New York, Massachusetts, and New Jersey. The rate is supposed to increase again in 2024 in several states, such as Florida and Maryland. 

• The minimum wage in California has been increased to $15.50 (~₹1,281) per hour in 2023. The rate is set to increase again next year, starting from  January 1, 2024. California’s new hourly rate would be $16.00 (~₹1,323).

• The minimum wage in Florida is scheduled to increase to $12.00 (~₹992) on September 30, 2023.

• The basic minimum wage rate of $13.25 (~₹1,095) in Maryland is supposed to increase to $15.00 (~₹1,240) from 1 January 2024. 

• The state of Nevada has declared to raise its minimum wage into $12.00 (~₹992) from $11.25 (~₹930) starting on 1 July 2024. 

Although few states still remain with their Federal minimum wage of $7.25  (~₹599) as their state minimum wage since 2009, most states have increased their minimum wages annually to reach a goal of $15 (~₹1,240) per hour.

What are Federal Minimum Wage and State Minimum Wages in USA?

The U.S. Department of Labor (DOL) enforces the Federal Minimum Wage. According to the Fair Labor Standards Act (FLSA), all employers in the country must pay their workers a standard minimum wage of $7.25  (~₹599)  per hour. The rate was last revised in 2009. 

States can authorise their minimum wage rates besides the fixed national rate. However, this has to be above the Federal Minimum Wage of $7.25  (~₹599). 

The rationale is that different states will usually set a minimum wage or a basic salary that reflects the cost of living in that particular region. For example, Massachusetts’s basic salary or minimum wage is $15 (~₹1,240) in 2023, while Montana offers a minimum wage rate of $9.95 (~₹822) per hour. 

As of January of 2023, the rate of state minimum wages in USA has exceeded the federal minimum wage of USA rate in 30 out of the 50 states in the country. 

In addition to the state-wise minimum wage rate, cities can also decide to increase their minimum wage according to their requirements. Cities with a minimum wage rate above their states are Seattle, with a minimum wage rate of $18.69 (~₹1,545) per hour, New York City $15 (~₹1,240); and $17.95 (~₹1,484) per hour in Sunnyvale. 

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Benefits of Minimum Wages in USA

The minimum wage in the USA promises a standard and fixed hourly payment for all the country’s employees, irrespective of race, class, or ethnicity. 

In addition to its primary objective, the minimum wages in USA also provides other benefits. They are as follows. 

• Improve the standard of Living: Through the minimum wages in USA, the country could assure a minimum wage for all the basic workers, which could help to raise the country’s overall standard of living. 

• Reduce Poverty: The minimum wage in USA provides basic pay for all workers, thus allowing them to afford the basic cost of living.

• Income equality: The minimum wages in USA enables employees to receive the standard hourly payment irrespective of their gender, class, or nationality. 

• Ensure Economic Growth: The increase in payments leads to a subsequent increase in your expenditure. As a result, consumer expenditure rises, leading to overall economic growth.

Increasing a country’s minimum wage not only provides support to its working class but also contributes to the overall growth of a country’s economy. 

Minimum Wages in USA: Eligible Jobs

Minimum wage jobs or basic salary jobs in the US are traditionally seen as “starter jobs” that help you kickstart your journey in the US. It is also known as the first job for teenagers and young adults, which offers a basic salary in the US. 

Interestingly, the number of people working minimum wage jobs has decreased from approximately 4 million in 1979 to about 2,47,000 in 2020. 

Jobs offering a minimum wages in the US are primarily in food preparation, serving occupations, and sales. They are the basic jobs that receive the minimum payment for their services. 

The list of minimum wage jobs that received the basic income increased every year since the declaration of the minimum wages in USA. 

According to the National Occupational Employment and Wage Estimates, the least-paid occupational sectors include the following groups. 

• Gaming Dealers
• Combined food preparation and serving workers
• Waiters and waitresses
• Cafeteria attendants and bartender helpers
• Cooks 

The list includes other minor jobs such as dishwashers, table setters, sales clerks, housekeepers, childcare providers, and more. 

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Exceptions for Minimum Wages in USA

Although the minimum wages in USA enables its basic workers to receive a minimum standard payment for their work, certain groups of workers are exempted from this benefit. 

Individuals falling under these groups are typically paid below the minimum wages in USA to incentivise organizations/companies to hire them.

Workers Who are Tipped

Low-wage labourers in the United States can be exempt from the minimum wages in USA or the basic salary, if a sizable portion of their income is obtained from tips. 

A minimum wage of $2.13 (~₹176) per hour may apply to tipped employees who frequently receive more than $30 (~₹2,480) monthly tips. 

However, this is applicable only if the total tips, in addition to the hourly wage rate, are equal to or greater than the federal minimum wage or basic salary in the US as decided by the Bureau of Labor Statistics. 

In cases where the employee’s overall tips and hourly rate fall below the minimum wages in USA, the employer is supposed to reimburse the employee for the shortfall.

Students

The federal law says that a student working full time for a university, whether in a retail store, a service institution, or more, cannot be paid less than 85% of the basic salary in the US. 

Full-time students are not allowed to work more than eight hours a day and not more than 20 hours a week when school is in session. When school is closed, you can work 40 hours per week. 

Once you graduate or leave school after completing your studies, you must be paid $7.25 per hour as any other worker. 

Employees Under 20 Years Old

Workers under 20 years of age can get paid $4.25 (~₹351) per hour during the first three months of probation. 

After this period, or if you turn 20 years of age before that, the employer must revise your pay structure to the amount as advised by the federal minimum wages in USA.

People with Physical or Mental Disabilities

Blue-collar workers with physical or mental disabilities can be paid less than the federal minimum wage, according to the Fair Labor Standards Act (FLSA). 

An employer can reduce your minimum wage rate if you are mentally or physically disabled. The reduced rate is applicable only if the disability reduces your ability to work in a given job. 

Disabilities that can impact production capacity in certain businesses include blindness, cerebral palsy, alcohol and drug addiction, mental illness, and developmental disabilities

It is important that the employer must inform the employee regarding the reduction in the payment. 

If you are physically challenged and working for the Federal Government, you should receive a minimum wage of $10.10 (~₹835) per hour. 

Minimum Wages in USA: State-wise Distribution

The rate of minimum wages in USA has increased gradually in most states, in response to the government’s urge to reach the goal of $15 (~₹1,240) per hour. However, a few states have maintained the Federal minimum wage as their state minimum wage since 2009. 

The table below shows the list of states with a minimum wage above the federal minimum wage of $7.25 (~₹599) per hour. 

The following states have maintained their minimum wage unchanged from the federal minimum wage of $7.25 (~₹599) per hour. 

• Alabama
• Georgia 
• Idaho
• Indiana
• Lowa
• Kansas
• Kentucky
• Louisiana 
• Mississippi
• New Hampshire 
• North Carolina
• North Dakota
• Oklahoma
• Pennsylvania
• South Carolina
• Tennessee
• Texas
• Utah
• Wisconsin
• Wyoming 

Apart from the standard minimum wage imposed by each state, other minimum wage rates are allocated for small-scale industries or rural areas. 

For example, the standard minimum wage in New Jersey is $14.13 (~₹1,168). But for seasonal and small employers with less than six workers, the rate is $12.93 (~₹1,069) . 

You can visit the official website for more detailed information regarding the minimum wages of USA. 

Minimum Wage vs. Living Wage

The minimum wages in USA is the lowest amount determined by the government that needs to be paid to a worker for every hour of work. Paying an individual below the determined minimum wage is illegal in the USA. 

On the other hand, a living wage is the amount an individual would need to live in a country without poverty. This amount is usually higher than the minimum wage and it is not mandated by the law.

The living wage in the USA varies across the states. The highest living wage applies to Hawaii, with an estimated monthly rate of ₹1,24,484 without rent. 

An ideal range of minimum wage for a state is when it could meet the living wage of the state. The new initiative to raise the minimum wage to $15 (~₹1,240) could be a good step towards this goal. 

High Salary Jobs in USA 2024

Finding a good job with financial stability is important. The USA is one of the top countries for high-salaried jobs across the world. 

Depending upon your skills and level of experience, your salary can increase from the minimum wage for any job. 

Given below are the top jobs in the USA for 2024. 

Your salary can vary depending on your educational qualifications, level of experience, work location, and many other factors. Proper training and practice can always boost your expertise in your field of work.

Final Thoughts

The Federal Minimum Wage of the USA assures foreign students the same basic salary as native workers. 

The minimum wages in USA assures you a basic standard payment for your work in the country. But, if you are skilled and earn training and experience in your field, the chances are high that you will be better positioned in your job with a higher salary. 

Finding a job that suits your qualifications and skills is important as a foreign student. To find a good job you can either directly visit the websites of top companies, or prefer job recruiting agencies such as Linkedin or Kelly Services. Maintaining a good professional network is also important to find a good job in the USA. 

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