Over the past several years, there has been a push to increase the federal minimum wage from $7.25 an hour - where it has sat for decades - to at least $15. While the federal government has yet to pass such a law, many states or municipalities, such as New York and San Francisco have enacted a $15/hr law, while Seattle has risen its city-wide minimum wage to $15.45. While much attention has been given to the highest minimum wage jurisdictions, here we take a look at the laggards.

(See also: The Top 5 US Cities with Highest Minimum Wage)

Key Takeaways

  • The minimum wage is the legal lowest amount an employer can pay an hourly worker.
  • The federal minimum wage has been stuck at $7.25 for more than a decade now, but many states have their own minimums.
  • A handful of states have lower minimums than $7.25, however the federal minimum wage will nonetheless apply.

Lowest Minimum Wage States

As of February 2020, Georgia and Wyoming have the lowest state minimum wage requirements, according to data from the U.S. Department of Labor (DOL). At $5.15 per hour, each state has a minimum wage more than $2.00 below the federal mark of $7.25.

Despite these low state-approved minimums, federal law supersedes, and dictates that the higher of either the state or federal minimum is legally applicable, which means that the enforceable minimum wage in both states is actually $7.25. By this logic, no minimum wage requirement is functionally below the federal mark. Inversely, in states where the set minimum wage is above the federal mark, the higher amount applies. For example, Oregon has a minimum wage of $11.25, as of 2020, which is the lowest hourly wage that Oregon workers can receive from their employer.

Minimum Wage as Policy

The minimum wage has long been a divisive issue among economists since some disagree with the concept of a price floor for labor. Each state's own interpretation of what the minimum wage should be may reflect the politics behind this, but other factors, such as cost of living, may also be in play. However, the federal minimum wage does not automatically increase to match inflation, so cost of living is not directly proportional to the minimum wage by any official standards.

Thus, state minimum wage marks are open to interpretation of any number of factors based on each state's policy, as long as it is even with or above the federal level. Some states prefer to stay out of it altogether and have no set state minimum wage, thereby automatically setting the level to the federal mark.

(For more, see: The Minimum Wage: Does It Matter?)