2012 vs 2011 Federal and State Minimum Wage Rates

This article was last updated on December 27

[Updated for 2012 Rates and Changes] The federal minimum wage rate in 2012 stays at $7.25, or $15,000 on an annualized basis. However 18 states and Washington, D.C., have raised rates above the federal level to keep up with increases in the cost of living (see graphic below). This helps state workers because if federal and states have different minimum wage rates, the higher rate applies.

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[Updated Apr 2011] The Federal minimum wage rate was $7.25 in 2010 and 2011. With low inflation will probably only rise fractionally in 2012.  However, President Obama has advocated increasing the federal wage floor to over $8 per hour in 2012 and indexing future increases to the inflation rate. Over 35 million working Americans only get paid minimum wage, which means that the minimum wage rate has a broad impact and is closely watched by a large portion of workers and employers. For example in the retail and dining industry, employees only get paid minimum wage and rely on commission and tips to make ends meet. There is no set formula or timeline for calculating the minimum wage and is based on a variety of federal/state factors along with the prevailing inflation rates.

However states may have different minimum wage requirements to federal standards; and where federal and state law have different minimum wage rates, the higher rate applies. Thus the federal minimum wage law supersedes state minimum wage laws where the federal minimum wage is greater than the state minimum wage. Alternatively, in those states where the state minimum wage is greater than the federal minimum wage, the state minimum wage prevails.  Based on the latest minimum wage rates, the State of Washington has the highest minimum wage at $8.55/hour. The states of Georgia and Wyoming have the lowest minimum wage ($5.15)

2010 and 2011 Federal Minimum Wage Rates

As shown in the graphic, there are 5 states in 2010 than have a minimum state wage set lower than the federal minimum wage. There are 14 states (plus DC) with minimum state wage rates set higher than the federal minimum wage. There are 26 of the states that have a minimum wage requirement that is the same as the federal minimum wage requirement. The remaining 5 states do not have an established minimum wage requirement and conform to federal limits

Some State Minimum Wages Set to Rise – Over 600,000 workers across the nation will be getting a pay rise in 2011 as their states adjust the state minimum wage following a cost of living adjustment. The following state minimum wages (already greater than federal levels) are set to rise between 9 cents and 12 cents on Jan 1st : Arizona, Colorado, Montana, Ohio, Oregon, Vermont and Washington.

Unfortunately workers in some states like Florida, Nevada and Missouri are unlikely to see a minimum wage increase in 2011 since the cost of living didn’t rise enough in 2010 to trigger a wage hike.

Source: US Department of Labor


9 thoughts on “2012 vs 2011 Federal and State Minimum Wage Rates

  1. The cost get passed on. I do not understand the free lucch mentality. “Business will just pay the cost.” Look at what is going on with Obama care, they can not enact it because it will cost jobs, they delayed it and with the delay bringing it so close the the election, it will be delayed again. Business cut hours to not pay. When you ask more of business you are telling them to cut hours or incrase prices. People think they will just pay and everything will be the same and things will be better. It never works out that way. The depression we though that if we increased tariffs, it would decrease imports and people would buy US and that would incrase jobs, it failed so bad it lasted untill WWII. Carter Administation high interest rates hepled the poor. No it led to high infation and high unemployment. Business have no duty to the country. We have the higest corp tax rate and at the same time we curse business for going elsewere to pay less taxes. We are shooting ourselves in the foot over and over again. It is because people have been taught that business is bad, profit is bad, taxes are good and business needs to pay more. The bill gets paid, one way or the other. It is time we stoped going after business to tax and spend and have them spend, invest, and hire in the USA but as long as we keep after them they will go elsewere.

  2. You’re not addressing the full issue here! Do you not understand that a minimum wage increase like this hurts businesses who are struggling to make ends meet and higher-up, dedicated employees who used to believe they were satisfied with their job?

    For those who make (and rightfully deserve) more than minimum wage: it equals a deduction for them. I have employees who think they’re getting compensated well for their job performance, however, when the minimum wage goes up and their wage does not (because the business can’t afford it) they are left fealing cheated and undercompensated compared to how they used to. I think that if the minimum wage goes up, then everyone’s salary should be required to increase that same amount, otherwise they are getting a decrease in wage when you compare it the bare minimum! Unfortunately if that was the case: small businesses would go out of business and we’d have to rethink the whole flawed system. Oregon seems to only be concerned with the new hires and those who DON’T deserve a promotion or display the job performance to get an increase in pay… and certainly doesn’t allow employers to pay the higher wage they want to those who have proven to deserve it… because the less deserving employee’s wages keep requiring an increase.
    Think about it: for example, if you’re getting $0.50 more an hour because you have been rewarded for doing a better job than the other employees, then the minimum wage goes up $0.10 that year and $0.30 the next, but your wage doesn’t… how satisfied would you be when you end up only making $0.10 more than the new hires that you train who don’t amount to your proven ability? (And sometimes wages end up being exactly minimum wage when they used to be better)
    No one thinks about these things except me… when I’m faced with the idea of not being able to give my best employees a wage increase because of the huge expense the less qualified employees increase to… and have to face one of my best employees quitting on me not long after because they don’t feel they are being compensated enough by comparison!
    Think about the full picture, and how your wage is less than it used to be… don’t only think about the unfortunate ones… usually they can more than make ends meet by living with a surplus of people and getting an outrageous amount of tax credits each year by having all their kids… ETC
    We have the second highest minimum wage in the nation, and the business who employs me will practically be out of business soon because of it!
    I empathize with those bottom of the barrell workers who this minimum wage increase affects, however, I realize that it may very well be too generous considering the consequenses it entails for the rest… and if it keeps up each year like it has in Oregon, how many business owners will it do in?!

    1. I totally agree with this. If your a trainer who has been with accompany for more than 6 months and you are training a new employee it would be degrading to know your paycheck is lower than that of the trainee.

  3. Still doesn’t address the problem that there are adults without the skills to qualify for anything other than entry level (minimum wage) positions. Still doesn’t address that, overall, wages have stagnated for those making more than the minimum. The obvious consequenc­es will be sure to follow (youth unemployme­nt, redistribu­tion of funds that could go towards other aspects of the business, a spike in the price of the goods/serv­ices by that business, etc). Pretty much the same results that we get everytime this happens.

  4. that’s because Canadians are cowards. they hide behind America. they don’t have to invest their money in military. they only invest in hockey and whiskey. As one Canadian told me once “we don’t really have to worry about being attacked because they have to go through you first”.

    1. I know! I also usually base my opinion of an entire population on an off-handed comment by an individual. Why nobody is trying to vote this brilliant commentator into any kind of office is a mystery to me.

  5. Canada may be better off financialy, but my wife has had a family member who lives in Canada who was told that her cancer was bad enough by the Canadian Health Providers that she should just roll over and die. She came to Minnesota and got the treatment she needed. She is still alive and well, despite Canada’s best efforts. Canada has better money, but America has better medicine and values, at least until the President changes that.

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