As of May 2025, the federal minimum wage in the U.S. is still stuck at $7.25 per hour—a figure untouched since 2009. While the national baseline remains frozen, the cost of living, inflation, and economic needs have evolved dramatically. In response, many states and cities have taken wage matters into their own hands.
Let’s break down how the minimum wage landscape is shifting in 2025—and what that means for workers and employers alike.
Federal Minimum Wage Still $7.25 in 2025
Rising Wages: How States Are Taking the Lead
While federal law sets the floor, individual states and local governments are raising the ceiling. In 2025, a growing number of states have hiked their minimum wage rates far above the federal benchmark, adjusting to their regional cost-of-living and labor market realities.
If you live in Washington, California, or New York, you’re likely earning significantly more than the federal minimum—thanks to progressive wage policies.
2025 Minimum Wage Rates by State
Here’s a snapshot of what hourly workers are earning across the country in 2025:
State Minimum Wage (2025)
Alaska $11.91
Arizona $14.70
California $16.50
Colorado $14.81
Connecticut $16.35
Delaware $15.00
Illinois $15.00
Maine $14.65
Michigan $10.56
Minnesota $11.13
Missouri $13.75
Montana $10.55
Nebraska $13.50
New Jersey $15.49
New York $16.50
Ohio $10.70
Rhode Island $15.00
South Dakota $11.50
Vermont $14.01
Virginia $12.41
Washington $16.66
Note: Georgia and Wyoming still list $5.15/hour, but federal law ensures $7.25 as the enforceable minimum.
Who Sets the Rules? Federal vs. State Law
Under the Fair Labor Standards Act (FLSA), workers are guaranteed at least the federal minimum wage. But if a state or local wage is higher than the federal rate, employers must pay the higher amount. So, even in states with outdated wage laws, federal protection ensures no one legally earns below $7.25/hour.
Why Raise the Minimum Wage? Pros and Cons
Advantages
Better Living Standards: Helps workers afford essentials like housing, groceries, and healthcare.
Boosts the Economy: More income leads to more spending, which supports local businesses.
Reduces Welfare Dependency: With higher earnings, fewer people need government assistance.
Keeps Up With Inflation: Protects workers’ purchasing power over time.
Disadvantages
Job Risk for Small Businesses: Some may cut hours or staff due to higher labor costs.
Price Increases: Businesses might raise prices to cover payroll hikes, potentially contributing to inflation.
The Bigger Picture: Looking Ahead
Despite federal inaction, the momentum for change is clear. States across the nation are responding to economic realities and pushing for fairer wages. Whether the federal government will eventually follow suit remains uncertain—but state-level progress is already reshaping the financial future for millions of Americans.
FAQs: Federal Minimum Wage 2025
Q1. What is the federal minimum wage as of May 2025?
It remains $7.25 per hour—unchanged since 2009.
Q2. Which U.S. state has the highest minimum wage?
Washington leads with a $16.66/hour rate.
Q3. Why hasn’t the federal minimum wage increased?
Despite public debate, Congress hasn’t passed a law to raise it in over a decade.
Q4. Do employers follow federal or state law?
Whichever wage is higher—federal, state, or local—is the one employers must honor.
Q5. Will minimum wages increase in 2026?
Several states already have scheduled increases tied to inflation or policy updates.