While the federal minimum wage is $7.25, only 21 states actually have that as their own minimum wage. The other 29 states have minimum wage rates ranging from $8.65 to $15 in the District of Columbia. At a minimum wage of $7.25, a full-time employee will gross just $290 a week. An income this low can make meeting basic essential needs difficult.
What Is the Minimum Wage in Indiana?
The current minimum wage in Indiana is just $7.25 per hour, the federal minimum wage rate. This is the lowest rate paid in the country. It is also the same rate some nearby states like Kentucky and Tennessee pay. However, nearby Illinois’ minimum wage is $11.00 per hour, and Michigan’s minimum wage is $9.87 per hour.
Indiana’s minimum wage has been $7.25 since 2009, which coincides with the federal minimum wage rate increase to $7.25. Lawmakers have introduced multiple bills in Indiana to increase the state’s minimum wage rate to $10 or $9, but all of those bills failed.
Cost of Living Has an Impact
Even though the minimum wage in Indiana is low, the good news is that the cost of living there is also low. On a cost-of-living index with the average in America being 100 (and somewhere like Hawaii being 191.8), Indiana has a cost-of-living index of 81, which is much lower. Yet, the median home cost of $155,640 in Indiana is tough to afford if you’re employed at minimum wage. Still, the price of a home in Indiana is 8th in the nation for affordability (Business Insider).
Vogue recently argued that since the minimum wage was set at $7.25 twelve years ago, “inflation has risen at a rate of almost 24% in that time.” Clearly, $7.25 isn’t worth as much now as it was then. If you use an inflation calculator, you’ll see that $7.25 in 2009 is equal to $9.02 in 2021.
There May Be Hope of an Increase
While many hoped when Biden took office he’d be able to increase the federal minimum wage to $15, that effort is currently stalled. The $15 minimum wage was originally included in Biden’s $1.9 trillion stimulus package, but it was removed early to help the package pass. Biden has made it clear he wants a $15 minimum wage, so perhaps sometime during his presidency, it will pass. This would more than double Indiana’s current minimum wage rate.
Final Thoughts
Indiana’s minimum wage is $7.25, which is the federal minimum wage. While this is low, the cost of living in Indiana is also one of the lowest in the country, which helps make the minimum wage stretch further.
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