Current Minimum Wage Rates
The federal minimum wage has remained at $7.25 per hour since 2009, which equates to $15,080 per year full time. If the federal minimum wage had kept pace with the cost of living over the past 40 years, it would be over $10.59 today, establishing that it has lost over 30% of its value. State minimum wage rates vary. In some states they are higher than the federal minimum, but they cannot be lower. Here's a list of state minimum wage rates.
With the support of the Senate Health, Education, Labor and Pensions Committee and the House Workforce Committee, President Obama's called to increase minimum wage in his 2013 State of the Union address with the Fair Minimum Wage Act of 2013.
If the legislation is passed, it will raise the federal minimum wage to $10.10 per hour by the year 2015, in three tiers of 95 cents. It will adjust the minimum wage to keep pace with the rising cost of living in 2016 through "indexing," a process that ten states are already using to keep the minimum wage afloat to avoid inflation.
The Fair Minimum Wage Act would also raise the minimum wage for tipped workers up by over 70% of the full minimum wage.
How the Minimum Wage Would Increase
If this legislation is passed, the federal minimum wage would increase from $7.25 an hour to:
- $8.20 an hour, beginning three months after the legislation is passed
- $9.15 an hour, beginning one year after the legislation is passed
- $10.10 an hour, beginning two years after the legislation is passed
Starting the third year after the legislation is passed, the minimum wage would be adjusted anually based on the Consumer Price Index.
The legislation would also increase the hourly rate of tipped workers from $2.13, in annual 85 cent per hour increases, until it reaches 70% of the regular minimum wage.