Proportion of workers in selected pay ranges by region and State, 2005

State differences in the distribution of workers earning hourly rates above or below the Federal minimum wage of $5.15 are a function not only of the occupational distribution and prevailing wages in each State, but also of the widely ranging State minimum wage provisions above the current Federal

minimum.1 Since the last regional report on State pay ranges was issued with 2002 data,2 some States that previously did not have minimum wage provisions have added them, while others have begun indexing existing State minimum wage requirements to provide annual increases. Several States that have not had minimum wage laws held referendums in 2006, allowing voters to determine whether their State should have provisions beyond the Federal minimum wage.

In 2005, 2.5 percent of the 75.6 million U.S. wage and salary workers who were paid hourly rates earned the Federal minimum wage of $5.15 or less, down from 2.7 percent of such workers in 2004, 2.9 percent in 2003, and 3.0 percent in 2002. Among the census regions, the South recorded the highest proportion of workers with earnings in this range, 3.1 percent, and the West registered the lowest share, 1.5 percent. Among the nine census geographic divisions, the West South Central reported the largest percentage at or below $5.15, 3.4 percent, while the Pacific had the smallest, 0.9 percent. (See table 1.)

Twenty-nine States-including all of those in the South except Delaware and Maryland-recorded higher percentages of workers paid $5.15 or less in 2005 than did the United States as a whole. In contrast, 21 States-including all of those in the Pacific and two-thirds of those in New England-and the District of Columbia had shares of workers earning at or below the Federal minimum wage that were smaller than the U.S. share. (See chart 1.) The largest proportions of hourly workers earning $5.15 or less were reported in Oklahoma and West Virginia, 4.3 percent each, followed by Louisiana and South Dakota, 3.8 percent each; Arkansas and New Mexico, 3.6 percent each; and Kansas, Mississippi, and Missouri, 3.5 percent each. The largest numbers of workers earning the Federal minimum wage or less lived in Texas (176,000), Florida (117,000), Ohio (111,000), Pennsylvania (97,000), New York (95,000), Michigan (88,000), and California (82,000).

Pacific division States generally had the lowest proportions of workers earning $5.15 or less-Alaska, 0.5 percent; Washington, 0.6 percent; California, 0.9 percent; and Oregon, which tied with Connecticut at 1.0 percent. All 14 of the States and the District with minimum wage provisions above the Federal minimum had lower shares of workers earning $5.15 or less than did the United States, with the exception of Rhode Island, which was slightly above the U.S. share at 2.6 percent.

In a higher wage group, 85.1 percent of U.S. workers paid by the hour earned at least $7.15 in 2005. Among regions, the West had the highest share of workers, 87.2 percent, paid in this range, while the South registered the lowest share, 82.6 percent. Among the nine divisions, New England reported the largest proportion of workers, 90.2 percent, earning at or above $7.15 per hour, with all six States recording shares above the national average. The West South Central division had the lowest proportion of workers in this range, 78.8 percent, with all four States below the U.S. average.

Among the States, Alaska had the highest percentage, 96.1 percent, of hourly workers earning $7.15 or more in 2005, followed by Oregon, 94.9 percent; Washington, 94.5 percent; and Connecticut, 92.5 percent. Twenty-six States and the District of Columbia reported higher shares in this pay range than did the United States, including 12 of the 14 places with minimum wage provisions in effect in 2005 that were higher than the Federal minimum wage.3 (See chart 2.)

Louisiana reported the lowest proportion, 77.2 percent, of hourly workers earning at least $7.15. Six additional States in the South, along with New Mexico, reported the next lowest proportions- Texas, 78.7 percent; West Virginia, 79.3 percent; Arkansas, 80.1 percent; Oklahoma, 80.3 percent; and New Mexico, Mississippi, and Alabama, 80.4 percent each. As noted earlier, these States were also among those with the highest shares of workers earning $5.15 per hour or less.