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Basic Salary In the US 2022: Minimum Wage Comparison by States

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What Do We Mean by Minimum Wage?

The minimum wage or the basic salary is the lowest wage/pay per hour that a worker may be paid, as authorised by the federal law of a country. It is a legally binding price on hourly wages, below which non-exempt workers cannot be offered a job or jobseekers can deny working.

What is the Minimum Wage to Work in the USA?

The federal minimum wage or basic salary in the United States is 7.25 US dollars per hour. However, the basic salary in the United States varies from state to state. As of January 1, 2022, it is reported that the District of Columbia has the highest minimum wage in the US, at 15.2 US dollars per hour. The same can be seen being repeated and followed by California, which now has 15 US dollars per hour minimum wage at the state level.

Is There a Difference Between Federal Minimum Wage and State Minimum Wages?

Even though the United States administers a federal minimum wage or basic salary in the US, individual states, cities, and/or localities may pass separate minimum wage requirements provided the agreed hourly wage or the basic salary in the US is not lower than the federal base salary.

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Basic Salary In the US 2022: Minimum Wage Comparison by States

The rationale is that different states in the country will usually set a minimum wage or a basic salary that reflects the cost of living in that particular region. For example, the basic salary or minimum wage of Massachusetts is $14.25 per hour (going up to $15 in 2023 as an estimation), while Montana offers a minimum wage rate of $9.20.

As of January of 2022, minimum wage rates have exceeded the federal rate in 30 out of the 50 states in the united states. This means that the basic salary in the US has increased, and when we look at the District of Columbia, it has the highest minimum wage or basic salary at $15.20 per hour. The second highest, which is $15, is paid to some parts of New York and California (more than 25 employees do so). The third highest is $14,49, and the minimum wage or basic salary is paid by Washington State.

Minimum Wage or Basic Salary Workers

Minimum wage jobs or the 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. Interesting to note that the number of people working minimum wage jobs has decreased from approximately 4 million in 1979 to about 247,000 in 2020. However, it is also significant to note that the number of workers who were earning less than minimum wage or basic salary in the US in 2020 was significantly higher β€” about 865,000.

What Kind of Jobs Are Considered Minimum Wage Jobs?

Minimum wage jobs offering a basic salary in the US are primarily discovered in food preparation and serving occupations, as well as sales (primarily in retail). Because the minimum wage has not increased as soon as the inflation has, and because the federal minimum wage has not been revised since 2009, it is becoming harder for minimum wage workers or basic salary workers to afford essential things like rent with just one minimum wage job.

If you want to know the specific median wage jobs in these areas, they include the following: wait staff, dishwashers, table setters, sales clerks, housekeepers, childcare providers, and more. General labour is represented by another common area where minimum wage or the basic salary in the US is paid by employers.

Are There Any Exceptions to the Minimum Wage in the US?

Several groups of individuals are exempt from being paid the minimum wage. Individuals falling under these groups are typically paid below the minimum wage in the United States to incentivize organizations/companies to hire them.

Workers who are tipped

Low-wage labourers in the United States can be exempt from the minimum wage or basic salary in the US if a sizable portion of their income is obtained from tips. A minimum wage as low as $2.13 per hour may apply to tipped employees who frequently receive more than $30 in tips per month or if the total tips maintained 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 wage, the employer is supposed to reimburse the employee for the shortfall.

Students

The federal law says that a student who is 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. While students may be allowed to work up to eight hours per day, they cannot do so for more than 20 hours per week, especially because they also have to attend school.

Workers Under 20 Years

Workers under 20 years of age can get paid $4.25 per hour when they spend a total of three months in the probationary period. Post this period, the employer must revise their pay structure to the amount as advised by the federal minimum basic salary in the US.

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

A Minimum Wage Budget

According to official government guidelines, people who are living alone supporting themselves on minimum wage are not theoretically living in poverty. If you are devoting a standard 40-hour workweek at $7.25 per hour (as prescribed by the bureau of labor statistics), you technically are earning 290 USD.

Assuming a person works for 52 weeks per year β€” considering the best-case scenario where they take no time off for vacation, no illness-induced leaves, or family emergencies, without overtime β€” it equates to up to $15,080 per year. This amount is considered enough to place a single worker $2,200 over the official poverty guideline standardised for most of the country by the US Department of Health and Human Services.

What is the Minimum Wage Across States in the US?

As of January 1, 2022, the Economic Policy Institute’s Minimum Wage Tracker depicts the following:

  • Alabama: $7.25
  • Alaska: $10.34
  • Arizona: $12.80
  • Arkansas: $11
  • California: $15
  • Colorado: $12.56
  • Connecticut: $13
  • Delaware: $10.50
  • Florida: $10
  • Georgia: $7.25
  • Hawaii: $10.10
  • Idaho: $7.25
  • Illinois: $12
  • Indiana: $7.25
  • Iowa: $7.25
  • Kansas: $7.25
  • Kentucky: $7.25
  • Louisiana: $7.25
  • Maine: $12.75
  • Maryland: $12.50
  • Massachusetts: $14.25
  • Michigan: $9.87
  • Minnesota: $10.33
  • Mississippi: $7.25
  • Missouri: $11.15
  • Montana: $9.20
  • Nebraska: $9
  • Nevada: $9.75
  • New Hampshire: $7.25
  • New Jersey: $13
  • New Mexico: $11.50
  • New York: $13.20
  • North Carolina: $7.25
  • North Dakota: $7.25
  • Ohio: $9.30
  • Oklahoma: $7.25
  • Oregon: $12.75
  • Pennsylvania: $7.25
  • Rhode Island: $12.25
  • South Carolina: $7.25
  • South Dakota: $9.95
  • Tennessee: $7.25
  • Texas: $7.25
  • Utah: $7.25
  • Vermont: $12.55
  • Virginia: $11
  • Washington: $14.49
  • West Virginia: $8.75
  • Wisconsin: $7.25
  • Wyoming: $7.25
  • Washington, D.C.: $15.20

Source: Economic Policy Institute’s Minimum Wage Tracker

How Often Does the Federal Minimum Wage Increase?

There have never been any automatic increases in the past. For minimum wage to increase, the government must pass a bill that the President must sign for it to come to effect.

There’s Merit in Moving Beyond the Minimum Wage

It is noteworthy that if you’re more skilled with the help of training and experience, the chances are high that you will be better positioned to get a hike, either by your current employer or at a new job. If you are ready to take the first step, take up a professional course in the US and check out more articles on LeapScholar that can provide you with career advice for the right headway to getting appropriate jobs in the US. Increase your years of experience in the US to earn more than the average salary.

Frequently Asked Questions

1. Is there a minimum wage for workers who receive tips?

An employee may be tipped not less than $2.13 an hour in direct wages if that amount plus the tips received is equal to the federal minimum wage. The employee gets to keep all tips (even the employees who regularly receive more than $30 a month in tips). When combined with the employer’s direct wages of at least $2.13 and the tips that the employee gets in an hour do not equal the federal minimum hourly wage, the employer must pay up the difference to the employee.

2. Who ensures that workers are paid the minimum wage?

The Wage and Hour Division of the US Department of Labor is responsible for carrying out the law around the minimum wage. Using both imposition and public education efforts, the Wage and Hour Division endeavour to ensure that workers are paid the minimum wage or basic salary in the US.

3. To whom does the minimum salary apply?

The minimum wage law, called the FLSA, applies to employees of enterprises that have an annual gross sales or business of at least USD 500,000. The law also applies to employees of firms that are small-sized – where the employees are engaged in interstate commerce or in the production of goods for commerce. The law is also applicable to employees of federal, state, or local government agencies, including schools, hospitals, and even to domestic workers.

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Atima Khurana

Atima has 12+ years of experience in the field of overseas education and she specializes in U.S. admissions.

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