Question of the Month
June
2005
Do
any Midwestern states mandate a minimum wage higher than the
requirement set in the U.S. Fair Labor Standards Act?
Illinois is
currently the only Midwestern state that has a minimum wage
requirement higher than the federal standard, though Minnesota and
Wisconsin will soon be added to the list as the result of
actions taken earlier this year.
The Illinois measure was signed into
law in 2003 and phased in over two years. On January 1, 2004, the
state’s rate went from $5.15 an hour (the same as the federally
mandated level) up to $5.50. At the beginning of this year, the rate
increased again to $6.50. Workers under the age of 18 may be paid 50
cents less. According to the office of Gov. Rod Blagojevich, an
estimated 450,000 workers were making $5.15 an hour before the law was
signed.
Minnesota Gov. Tim Pawlenty signed a
bill last month that will boost the state’s minimum wage to $6.15
for large employers beginning in August. The requirement for small
businesses (those whose annual gross volume of sales or business is
less than $625,000) will be $5.25. Workers under the age of 20 can be
paid $4.90 an hour during their first 90 consecutive days on the job.
Meanwhile, in Wisconsin, lawmakers and Gov. Jim Doyle have worked out
a deal that will, through a two-step process, raise the state’s
minimum wage from $5.15 to $6.50 an hour. The agreement also prohibits
local communities from instituting their own wage requirements.
According to the U.S. Department of
Labor, 11 states outside the Midwest have minimum wages above the
federal standard. Seven states (none in the Midwest) do not have any
wage laws. It is most common for a state to have the same requirement
as the federal standard. Midwestern states that fall into this
category are Indiana, Iowa, Michigan, Minnesota, Nebraska,
North Dakota, South Dakota and Wisconsin. Kansas ($2.65
an hour) and Ohio ($4.25 an hour for larger businesses and
$3.35 and $2.80 for smaller ones) are the only states in the country
that have rates lower than the federal requirement.
Like the U.S. wage and hour law, the
Department of Labor says, state statutes often exempt particular
occupations or industries. More information is available at www.dol.gov/esa/minwage/america.htm.
For
more information on this or any other public policy issue, please call
630-925-1922 or complete the online
form for research services.
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