Topline
Minimum costs violations reached a grounds precocious successful 2025, according to Cleveland Fed researchers who recovered astir 5.8 cardinal workers successful the U.S. were shortchanged—primarily successful states pinch the highest minimum wages.
The minimum costs successful the U.S. is $7.25 per hour.
Photo by Cris Faga/NurPhoto via Getty Images
Key Facts
A grounds 5% of non-exempt workers, labor who tin person minimum costs and overtime pay, crossed the 10 astir populous states successful the U.S. were paid beneath the minimum costs past year, according to a Cleveland Fed study drawing connected Census Bureau data.
Researchers estimated astir 6.5 cardinal workers successful the U.S. were paid beneath the minimum costs past year, pinch astir 5.8 cardinal experiencing an outright usurpation arsenic opposed to a ineligible exemption.
Among workers experiencing minimum costs violations, underpayment was astir $95 a week, which is beneath the 2023 highest of complete $110, but still good supra humanities norms.
Cleveland Fed researchers recovered a deficiency of enforcement whitethorn beryllium a driving logic down costs theft, arsenic 7 states had nary investigators to grip minimum costs violations while 26 states had less than 10 investigators to grip lawsuits aliases administrative costs claims successful 2018.
Which States Are The Largest Offenders?
The emergence successful minimum costs theft is chiefly driven by states pinch minimum costs requirements good supra the national minimum—California ($16.90), Florida ($14), New York ($16) and Illinois ($15).
Surprising Fact
The national minimum costs has been stiff astatine $7.25 an hr for astir 20 years complete legislature gridlock, marking the longest play successful U.S. history it has been near unchanged.
Big Number
Over $1.5 billion. That is really overmuch successful stolen wages was recovered betwixt 2021 and 2023 done federal, authorities and section enforcement, according to the Economic Policy Institute.
Key Background
The national minimum costs has stalled astatine $7.25 per hr since 2009, pushing dozens of states to group their ain minimum costs higher, thing the Cleveland Fed researchers person considered a imaginable nexus to an uptick successful usurpation rates. The researchers said a driver of the problem is linked to the Department of Labor conscionable enforcing the national level and not authorities minimums, leaving states to enforce their ain rules. A 2021 Pew Research survey recovered astir six-in-10 U.S. adults supported raising the minimum costs to $15 an hour, and erstwhile President Joe Biden attempted to raise the minimum costs to $15 an hr complete a five-year course, though the authorities grounded aft facing beardown guidance from Republicans and immoderate mean Democrats concerned pinch its imaginable effect connected occupation losses. Inflation and prices were Americans’ largest self-reported financial challenges, according to Federal Reserve data, followed by basal surviving expenses and housing.
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