December 11, 2003
Differences among States in the share of workers earning the Federal minimum wage or less are a function of the occupational distribution and prevailing wages in each State, as well as of the existence of a wide range of minimum wage provisions at the State level.
In particular, some States set minimum wage rates above the Federal minimum, currently $5.15 an hour.
In 2002, 3.0 percent of U.S. wage and salary workers who were paid hourly rates earned the Federal minimum wage of $5.15 or less. The South recorded the highest percentage of workers earning in this range, 3.7 percent, while the West registered the lowest share, 1.8 percent.
Among the States, West Virginia recorded the highest proportion of hourly workers paid $5.15 per hour or less (5.6 percent). The State of Washington had the smallest proportion of such workers (0.7 percent).
These data are derived from the Current Population Survey. It should be noted that the presence of a sizable number of workers with reported wages below the minimum does not necessarily indicate violations of the Fair Labor Standards Act, as there are exemptions, such as tip credits, to the minimum wage provision of the law. Also, among those with reported wages below the minimum in 2002, almost 500,000 reported earning exactly $5.00 per hour; to some extent, this may reflect rounding in the responses of survey participants. Find out more in "Proportion of workers in selected pay ranges, by region and State," by Marie-Claire Guillard, Monthly Labor Review, September 2003.