[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.
[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)
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.