Since it was last re-set on July 24, 2009, the federal minimum wage in the United States has been $7.25 per hour. Some U.S. territories (such as American Samoa) are exempt. Some types of labor are also exempt: employers may pay tipped labor a minimum of $2.13 per hour, as long as the hourly wage plus tip income equals at least the minimum wage. Persons under the age of 20 may be paid $4.25 an hour for the first 90 calendar days of employment (sometimes known as a youth, teen, or training wage) unless a higher state minimum exists.
The July 24, 2009 increase was the last of three steps of the Fair Minimum Wage Act of 2007. The wage increase was signed into law on May 25, 2007, as a rider to the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007. The bill also contained almost $5 billion in tax cuts for small businesses.
The Supreme Court held that the federal minimum wage is constitutional and does not exceed the scope of the Commerce Clause in U.S. v. Darby Lumber Co., 312 U.S. 100 (1941).
In April 2014, the United States Senate debated the Minimum Wage Fairness Act (S. 1737; 113th Congress). The bill would amend the Fair Labor Standards Act of 1938 (FLSA) to increase the federal minimum wage for employees to $10.10 per hour over the course of a two year period. The bill was strongly supported by President Barack Obama and many of the Democratic Senators, but strongly opposed by Republicans in the Senate and House.
Prior U.S. minimum wages laws
The minimum wage was re-established in the United States in 1938 (pursuant to the Fair Labor Standards Act), once again at $0.25 per hour ($4.10 in 2012 dollars). In United States v. Darby Lumber Co. (1941), the Supreme Court upheld the Fair Labor Standards Act, holding that Congress had the power under the Commerce Clause to regulate employment conditions.
The minimum wage had its highest purchasing value ever in 1968, when it was $1.60 per hour ($10.79 in 2014 dollars). From January 1981 to April 1990, the minimum wage was frozen at $3.35 per hour, then a record-setting wage freeze. From September 1, 1997 through July 23, 2007, the federal minimum wage remained constant at $5.15 per hour, breaking the old record.
Congress then gave states the power to set their minimum wages above the federal level. As of July 1, 2010, fourteen states had done so. Some government entities, such as counties and cities, observe minimum wages that are higher than the state as a whole. One notable example of this is Santa Fe, New Mexico, whose $9.50 per hour minimum wage was the highest in the nation, until San Francisco increased its minimum wage to $9.79 in 2009. Another device to increase wages, living wage ordinances, generally apply only to businesses that are under contract to the local government itself.