Just over 1.8 million American workers earned the federal minimum wage of $7.25 an hour or less in 2017, according to Labor Department estimates. This group collectively represents about 2.3 percent of all hourly workers. Most of these low-wage workers are tipped employees exempt from the $7.25 hourly minimum rate. Full-time students and certain other categories of workers are also exempt.
Numbers of minimum-wage workers are much more prevalent in some states than others. The most recent 2017 federal estimates suggest employees earning the federal minimum wage or less are most prevalent in Kentucky (4.4 percent), Mississippi (4.1 percent) and Tennessee (4.1 percent). These workers were least common in California, where they accounted for just 0.5 percent of the workforce.
Several factors explain variations across states. Most notably, more than half of states have enacted their own minimum wage laws, some well above the national rate. Differences in cost of living and concentrations of various low-paying industries also influence how many workers make at or below the federal minimum wage.
The following map shows each state's two-year average share of minimum wage workers as a percentage of all hourly workers for 2016-2017.
Figures represent estimated shares of the hourly workforce earning at or below the federal minimum wage of $7.25 an hour. Data exclude salaried workers and self-employed individuals. Margins of error can be high for smaller states, so two-year averages are shown in the map.
When both unemployment and wages are low, it's going to be difficult for employers to find the workers they need. They need to understand that from the outset.
Differences in wage laws and costs of living explain why they're more common in some places than others.