On January 1, 2013 ten states raised their minimum wage rate. Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island, Vermont and Washington increased their state's minimum wage. This increase is expected to effect 1 million low wage workers. The ten states that increased their minimum wage have laws that index the cost of living to automatically increase the state minimum wage.
While there is a Federal Minimum wage, each state is allowed to have a minimum wage as well. Whichever minimum wage – state or Federal is higher is considered the prevailing wage for workers in each state. There are 19 states that have a minimum wage above the Federal Minimum, most states match the Federal Minimum wage and 6 states have a minimum wage below the Federal Minimum wage.
The US Department of Labor established in 1938 a Federal Minimum wage. Currently the Federal Minimum wage is at $7.25/hr and is not indexed to increase with the cost of living. The last increase on the Federal minimum wage was in 2009. As a result the Federal Minimum wage buying power becomes weaker each year. In today's dollars the Federal Minimum wage would have to be raised $3 to have the same purchasing power of the 1968 Federal Minimum wage. Earning a minimum wage is considered to be low income wage.
With one in four Americans considered to be low wage workers who are earning $10/hr or less. For the low wage worker American Dream is on hold in a stagnant economy While the industries that employ low wage workers are growing at at a faster rate than the US economy. In 2012 there were eight states that increased their state minimum wage.
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