What Is a Minimum Wage? – Everything You Need to Know

The minimum wage is the lowest wage an hour a worker can receive; By the law. This is the standard price level for hourly wages; below, no proposed work may be performed or offered. The rules were first established in Australia and New Zealand. In order to increase the income of unskilled workers. Today, most current advanced economies, like several underdeveloped economies, have an ethnic minimum wage. Exceptions are Norway, Sweden, and Singapore.

This year the U.S. federal minimum wage is $7.25 per hour. This means that it is banned for an American employee to sell energy for less than $7.25 an hour. If the worker does not fall into a specifically exempt category from the rules, this is the case. For changes in the cost of living or inflation, the government periodically checks the federal minimum wage level. It is worth noting that the federal minimum wage has not increased since 2009.

While the U.S. carries a federal minimum wage; Individual states may impose different minimum wage requirements. This is provided that the hourly wage set will not be lower than the federal minimum wage.

Processes in The Different States

States usually set a minimum wage; Which reflects the cost of living in the region. For example, Massachusetts has a minimum wage of $14.25 per hour. Montana has a minimum wage of $9.20. As of 2022, minimum wage rates exceeded the federal rate by 30 out of 50 states. The highest minimum wage is in the District of Columbia, at $15.20 an hour. Next are California, New York, and Washington. Some states have notable exceptions to the minimum wage. These include Minnesota, Nevada, Oklahoma, and Florida.

Minimum Wages – how They Work

It is worth noting that several individuals are exempt from paying the minimum wage. Individuals belonging to these groups are usually paid a minimum wage below. This is because companies are encouraged to hire them. Low-wage employees can be immune from the minimum wage in the U.S.; if a significant fragment of their income comes from tips.

A full-time student may not have less than 85% of the minimum wage. Although students can work up to eight hours a day; They may not work more than 20 hours per week during the study period. Under federal law, workers under the age of 20 can be paid $4.25 an hour until they have passed the three-month probationary period. The employer then has to convert their pay structure to the federal minimum wage. Workers with physical or mental disabilities may receive less than the recommended.


The first law on the minimal wage appeared in the U.S. more than a century ago. In 1912, Massachusetts agreed on a minimal rate for children and women under 18. In 1938, the federal government established the rule according to the FLSA. The exchange rate is at $0.25, which is $4.93 today, considering inflation. According to Joe Biden’s American plan, the government is raising the bar to $15.17.

These laws are designed to eliminate labor exploitation. Also, ensure that the country’s working population does not fall below the poverty line. As the price of goods increases, so does the minimum wage. It is worth noting that critics say companies themselves must determine employee pay.

The spread of improved technologies in modern times raises the threshold for technical replacement of low-wage labor. When the cost of labor increases, it becomes increasingly profitable for companies to switch to labor replacement technology.




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