A nationwide livable wage would be close to $25 an hour, says Amy Glasmeier, a professor of economic geography at MIT. Michael M. Santiago/Getty Images
More than 20 states rang in the New Year by raising the minimum wage. The highest minimum wages are in the $16 to $17 range.
“And, according to our analysis, that is going to increase wages for almost 10 million workers,” said Sebastian Martinez Hickey, who tracks the minimum wage at the Economic Policy Institute.
He says more than half the workers getting a minimum wage hike are women. About 11% are Black, and more than a third are Hispanic.
Forty-three-year-old July Monroy makes $17 an hour — just above the minimum wage inLos Angeles —where she’s a manager at McDonald’s.
“My check is only like $800, $900 every two weeks,” she said.
That barely covers Monroy’s rent and other bills. So she cleans houses to make extra money. Monroy is a single mom with five kids who are all young adults. Her youngest son is 18 and still lives with her.
And two other sons in Texas also struggle to make ends meet making the minimum wage there, which is ”$7 or like $7.25, probably,” Monroy said.
She’s right — $7.25 an hour is the federal minimum wage and Texas is one of 20 states at that rate. Monroy said her sonsare also in community college. And if she has any money left at the end of the month, it goes straight to them.
“They’re living in Texas, doesn’t matter if they do like, 38, 40 hours they don’t making more than like $500 for every two weeks,” she said.
So her two sons in Texas are getting by on about $1,000 a month each.
“Yeah those are the stories that just make your hair raise,” said Amy Glasmeier, a professor of economic geography at MIT.
Glasmeier helped develop the Living Wage Calculator, which estimates what workers across the country would need to earn to cover the cost of living. They load prices for things like child care, housing, transportation and food into the calculator. And it spits out the living wage for a particular state or city.
“The minimum wage, in almost every location in the United States does not cover a living wage,” Glasmeier said.
She said even the highest minimum wage, $17 an hour, doesn’t cut it. A livable wage, nationwide, would be closer to $25 an hour, according to her research.
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FAQs
“The minimum wage, in almost every location in the United States does not cover a living wage,” Glasmeier said. She said even the highest minimum wage, $17 an hour, doesn't cut it. A livable wage, nationwide, would be closer to $25 an hour, according to her research.
What happens when we raise minimum wage on a market? ›
A boost to economic growth is another potential advantage of increasing the minimum wage, as consumer spending typically increases along with wages. A higher minimum wage would put more discretionary dollars in the pockets of millions of workers; money that would then flow to retailers and other businesses.
Is $17 an hour a livable wage? ›
California. California's living wage is $19.41, or $40,371 a year for an individual. A family of four requires $27.42, or $101,378 a year.
Why raising minimum wage is bad for the economy? ›
In general, increasing the federal minimum wage would raise the earnings and family income of most low-wage workers and thus lift some families out of poverty—but doing so would cause other low-wage workers to become jobless, and their family income would fall.
Are they really raising minimum wage? ›
The minimum wage in California, effective January 1, 2024, is $16.00/hour for all employers.
Why doesn't raising the minimum wage cause inflation? ›
No, the federal minimum wage is not tethered to inflation. The annual minimum wage set by the federal government does not change each year in response to changes in prices.
How much would prices increase if minimum wage increase? ›
Second, we estimate wage-price elasticities are notably lower than reported in previous work: we find prices grow by 0.36% for every 10% increase in the minimum wage, which is almost half of the previously accepted 0.7%.
How much is $30 an hour annually? ›
$30 an hour is how much a year? If you make $30 an hour, your yearly salary would be $62,400.
Is $20 an hour a liveable salary? ›
By this yardstick, 90% of Americans reside in a county where, to make a family living wage, they need to earn at least $20 an hour. Yet, some 36% of American workers fall short of the $20 threshold.
What state has the lowest minimum wage? ›
Five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Two states, Georgia and Wyoming, have a minimum wage below $7.25 per hour. In all seven of these states, the federal minimum wage of $7.25 per hour applies.
The higher federal minimum wage would also lift some 400,000 workers out of poverty, according to the CBO study. At the same time, the average estimate is that about 700,000 workers would lose their jobs. The median estimate is a reduction of 500,000 workers.
What is the California minimum wage? ›
Raising the minimum wage
California became the first state to commit to a $15 an hour minimum wage when then-Gov. Jerry Brown signed a law that ratcheted up the pay floor from $10.50 in 2017. The law included an inflation adjustment, which brought the California minimum wage to $16 an hour in 2024.
Why are fast food workers getting paid more? ›
The means the state's 553,000 fast-food workers will earn more than the state's $16 minimum wage for all other industries. The new baseline wage comes as the fast-food industry is seeing booming earnings, with big chains like McDonald's enjoying strong revenue growth and wider profit margins in recent years.
Is $25 an hour good in California? ›
California ranks number 27 out of 50 states nationwide for 25 Hr salaries. To estimate the most accurate annual salary range for 25 Hr jobs, ZipRecruiter continuously scans its database of millions of active jobs published locally throughout America. Find your next high paying job as a 25 Hr on ZipRecruiter today.
What should the minimum wage be in 2025? ›
The Raise the Wage Act of 2021 (HR 603) would increase the federal minimum wage in five annual steps, from $7.25 to $15 in 2025, with annual increases thereafter indexed to the median wage.
What happens when the minimum wage is above market equilibrium? ›
In a competitive market, the imposition of a minimum wage above the equilibrium wage necessarily reduces employment, as we learned in the module on perfectly competitive labor markets.
What are the advantages and disadvantages of the minimum wage? ›
The concept of a minimum wage has been a subject of debate and controversy for decades. While proponents argue that it ensures fair compensation for workers and reduces income inequality, opponents argue that it can lead to job losses and increased prices for goods and services.
How does raising minimum wage affect the poor? ›
The higher federal minimum wage would also lift some 400,000 workers out of poverty, according to the CBO study. At the same time, the average estimate is that about 700,000 workers would lose their jobs. The median estimate is a reduction of 500,000 workers.
What clears the market of a binding minimum wage? ›
A binding minimum wage means that minimum wages set by the government are above the equilibrium wages. Hence, the binding minimum wages cannot be cleared by the supply and demand. Thus, there is nothing that can clear the market of a binding minimum wage.
