Grocery store cashier, lifeguard, shampooer—these jobs might seem different on paper, but there’s one thing they all have in common: They often pay minimum wage.
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While some argue that raising it is essential for reducing poverty, others fear it could lead to inflation and job cuts. The complexity deepens with states setting their own minimum wages—some even below the federal rate—leading to a patchwork of wage laws.
The federal minimum wage hasn’t been raised since 2009. Over the past decade or so, proponents of significantly raising the minimum wage have argued that doing so could reduce reliance on government financial assistance programs and increase consumer spending. But opponents say higher labor costs could lead to job cuts.
Today, the federal minimum wage in the US is $7.25 per hour. But the country wasn’t founded with minimum wage laws in its DNA. The first federal minimum wage wasn’t set until 1938, when it was 25 cents per hour.
Being that the federal government hasn’t raised the minimum wage in over 15 years, some states have taken matters in their own hands.
If you’ve ever been asked to leave a tip when you’ve walked or driven to pick up takeout food yourself, that might have something to do with how minimum wage works for tipping. At just $2.13, the tipped minimum wage is lower than the normal federal minimum wage.
Unlike some other nations, the US minimum wage isn’t tied to inflation. So instead of it automatically rising alongside the cost of living, Congress has to vote to raise the minimum wage every time they think it’s necessary.
Unlike the US, some countries set the minimum wage by industry through collective bargaining agreements. In Luxembourg, the minimum wage translates to roughly $19.50 per hour, currently making it the country with the highest minimum wage in the world.
If you want all the details about when and why these rate increases happened check out this resource from the US Department of Labor.
In Luxembourg, for instance, the monthly minimum was roughly $2,140 as of January 2023. But in Nigeria, it was just $68 a month. Of course, the cost of living varies by country too.
Typically, minimum wage workers are young. They’re not only more likely to be a woman than a man, but also more likely to be single than married.
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