Minimum Wage
The legally mandated minimum hourly pay an employer must pay workers.
What is Minimum Wage?
The minimum wage is a legally established floor below which employers cannot pay workers for their labor. In the US, a federal minimum wage applies nationwide (currently $7.25/hour, unchanged since 2009), while many states and cities have set higher minimums. The economic debate over minimum wages is substantial: proponents argue it raises living standards for low-wage workers and reduces poverty; critics argue it increases labor costs, potentially reducing employment (particularly for young and low-skilled workers) or accelerating automation. Empirical research — including prominent studies by Card and Krueger and the Seattle minimum wage studies — has found mixed evidence, with moderate minimum wage increases often having smaller employment effects than traditional models predicted.
Example
Washington State has one of the highest state minimum wages in the US at $16.28/hour in 2024. Studies of Seattle's phased increase from $9.47 to $15/hour (2015–2018) produced conflicting findings: some found modest negative effects on low-wage hours worked; others found minimal employment impact and significant earnings gains for low-wage workers.
Source: University of Washington — Seattle Minimum Wage Study