Staying Informed About Minimum Wage

Once again, the Louisiana Legislature failed to pass legislation to increase the state minimum wage, the lowest amount that employers may legally pay workers. There are only a few exemptions to the minimum wage requirement: workers with disabilities, full-time students, workers under age 20 in their first 90 consecutive calendar days of employment, tipped employees and student-learners (however, you must comply with legal requirements for these exceptions).

The federal minimum wage, which has not increased since July 2009, remains at $7.25 an hour. Louisiana and six other states (Alabama, Georgia, Mississippi, South Carolina, Tennessee, and Wyoming) have not enacted a minimum wage or have a minimum wage lower than $7.25 so the federal minimum wage applies by default. Currently, 30 states and the District of Columbia have a minimum wage higher than the federal rate, with the highest set at $15.20 in D.C. 

Does the minimum wage provide a “living wage?”

The national minimum wage was established by Congress in 1938 under the Fair Labor Standards Act (FLSA). It was intended to create a minimum standard of living to protect the health and well-being of employees. President Franklin Delano Roosevelt declared “no business which depends for existence on paying less than living wages to its workers has any right to continue in this country,” clarifying that “by living wages I mean more than a bare subsistence level—I mean the wages of decent living.”

Andrew Bloomenthal writes in an article on the Investopedia website, “The hourly rate hasn’t kept up with the cost of living since the late 1960s. In fact, the earnings of a minimum-wage worker with a family of four fall well below the poverty line.” The federal poverty line in 2022 for a family of four is $27,750; the annual salary for a full-time minimum wage worker is $15,080 before payroll taxes are deducted.

“If minimum wages increased in Louisiana, 198,000 women – nearly 23% of all women in the workforce – would get a raise. About 180,000 workers of color – nearly 27% of all people of color in the state’s workforce – would also see a pay increase,” according to Davante Lewis, director of public affairs and outreach at the Louisiana Budget Project.

What are the arguments against raising the minimum wage?

Rep. Raymond Crews, R-Bossier City, quoted by the Louisiana Illuminator, says that increasing the minimum wage would “make Louisiana worse off and reduce opportunities for employment for those that most need a job.” Crews argued that minimum wage jobs are positions where people start, and keeping pay low for those jobs will motivate those workers to “move on up.” If the minimum wage is raised, he said those jobs won’t be available anymore because businesses couldn’t afford the increase or would consider automating the job cheaper.

Can employers hire and retain workers at minimum wage?

The short answer is “no.” Finding employees in the current job market is difficult already. Offering minimum wage guarantees that, if you are able to hire, employees aren’t going to stay very long. By comparison, Walmart and Amazon, two of the world’s largest employers, are paying new employees between $12 and $18 per hour with benefits (paid time off, health insurance, etc.).

As a business owner, if you want to hire and retain good employees, you need to pay more than $7.25 an hour to be competitive with other employers.

An HR professional can help business owners navigate workplace challenges. 

From hiring the right employees, running background checks, creating employee handbooks that include anti-harassment policies and procedures, and so much more, Next Level Solutions can work with you to provide the services that you need to run your business.

For more information about our accounting and human resource services, contact Next Level Solutions at info@nextlevelsol.net or (225) 330-8347.