2025 State-by-State Minimum Wage Guide: Rates from $5.15 to $17.50

Calls for raising the minimum wage continue to grow, with many advocating for an increase from the longstanding federal rate of $7.25 per hour, established in 2009, to $15 per hour. Although federal legislation has yet to be updated, numerous states and cities have independently adjusted their minimum wages to better reflect local economic conditions.

Key Highlights

• The minimum wage is the legally mandated lowest hourly pay for workers under the Fair Labor Standards Act.
• Since 2009, the federal minimum wage has remained at $7.25 per hour.
• As of January 2025, Washington, D.C. leads with the highest minimum wage at $17.50 per hour.

Origins and Evolution of Minimum Wage

The minimum wage sets the baseline hourly pay for covered employees, as defined by the Fair Labor Standards Act (FLSA). States have the authority to enact their own minimum wage laws, often setting rates above the federal standard to address regional living costs.

As of late 2024, 30 states, along with the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, have minimum wages exceeding the federal $7.25 floor. Cities like New York and Seattle have also implemented local minimum wages to accommodate higher living expenses. For example, Florida voters approved a gradual increase to reach $15 per hour by September 2026.

Among the remaining states, 13 maintain a minimum wage equal to the federal level, while some tie their rates directly to federal adjustments. Wyoming and Georgia have state minimum wages below the federal threshold, but federal law requires employers to pay at least $7.25 per hour. Alabama, Louisiana, Mississippi, South Carolina, and Tennessee have no state minimum wage laws, so the federal minimum applies.

States with the Highest and Lowest Minimum Wages in 2025

California ($16.50), Washington ($16.66), and the District of Columbia ($17.50) top the list for the highest minimum wages. On the lower end, Georgia and Wyoming have state minimum wages set at $5.15 per hour, but federal law mandates a minimum of $7.25 in these states.

Employers must comply with the higher of the state or federal minimum wage, ensuring workers receive at least the federal standard nationwide.

Important Considerations

Employers cannot legally pay nonexempt hourly employees less than the federal minimum wage of $7.25 per hour.

Some states apply minimum wage rates based on employer size or revenue. For instance, Arkansas requires $11 per hour for businesses with four or more employees, while smaller employers pay the federal minimum. Minnesota sets $11.13 per hour for large employers and $8.85 for smaller businesses.

Debates Surrounding Minimum Wage Policy

Opponents of raising the federal minimum wage argue it could increase unemployment, hurt small businesses, and drive up consumer prices. Proponents point to research by the Economic Policy Institute showing that the real value of the $7.25 wage has declined over time, disproportionately affecting Black workers and other marginalized groups.

Factors Influencing State Minimum Wage Levels

State minimum wages reflect political priorities and economic factors such as cost of living. While states must meet or exceed the federal minimum, they tailor wages to local conditions.

Federal Minimum Wage and Cost of Living

The federal minimum wage does not automatically adjust for inflation, and there is no official formula linking it directly to cost of living standards.

Historical First Federal Minimum Wage

The original federal minimum wage, established in 1938, was $0.25 per hour under the Fair Labor Standards Act.

Summary

The wide variation in minimum wages across states highlights differing perspectives on fair pay. While many advocate for increases to keep up with living costs, most states meet or exceed the federal $7.25 minimum. In states without their own laws or with lower rates, the federal wage remains the legal baseline.

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