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Everything you need to know about the minimum wage in Texas

Labor Activists And McDonald’s Workers Strike To Demand $15 An Hour

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By Joi Louviere

May 22, 2024

It was 2009. Chesley Sullenberger landed a plane on the Hudson, Kesha released her chart-topper “Tik Tok” and Barack Obama was inaugurated as the first Black U.S. president. There was no Instagram and more than half the country’s population carried Blackberrys.

That year was also the last time the minimum wage increased in Texas. And only because of a federal mandate. 

Last year, Texas officials said no to increasing the $7.25 minimum wage while 22 other states said yes. 

State Reps. Venton Jones and Ron Renyolds, both Democrats, sponsored a bill last year to increase the minimum wage to $15 an hour. It was never taken up for vote. 

All the while, the cost of living throughout the state has increased significantly. The Dallas-Fort Worth cost of living skyrocketed by 25 percent from March 2020 to March 2024 while The Bureau of Labor and Statistics cites a decrease in compensation for DFW workers in public and private industries. 

Let’s take a closer look at the minimum wage in Texas.

 

First of all, what is a minimum wage?

A minimum wage is the lowest amount you can be paid by cities or companies generating at least $500,000 a year. Established in 1938, minimum wage was included in the Fair Labor Standards Act to improve working conditions and boost the economy. This is also the time when a maximum workweek was established. 

 

What does life actually look like as a minimum wage worker in Texas?

A Dallas resident earning $7.25 an hour, working 40 hours a week, will make $15,080 per year before taxes. The national poverty line for a family of two is $16,020 per year.

Without family or government assistance, a minimum wage worker would not be able to afford to rent an apartment in Dallas, where the average yearly cost in 2024 is $16,428. Child care would also be out of reach: The average cost in Dallas is more than $30,000 a year.

 

Who typically earns the minimum wage in Texas? 

Minimum wage workers tend to be younger. Data compiled by the Department of Labor shows workers 25 and under make up about 45 percent of those earning $7.25 an hour or lower. Women, Black workers, and those who work in the leisure and hospitality industry are also disproportionately represented among minimum wage workers. 

On the plus side: We’re currently seeing the lowest number of workers making minimum wage or less since the U.S. started tracking this data in 1979. In 2022, 1.3 percent of hourly workers made minimum wage compared to 3.3 percent in 2015. 

 

What is the minimum wage in Texas for a tipped worker?

Texas tipped workers make $7.25 an hour, but employers can pay as low as $2.13 if they project the employee will make more than the $7.25 an hour in tips. 

 

What are the benefits associated with increasing the minimum wage?

From an economic standpoint, the general sentiment is that an increase can begin to pull people out of poverty, allowing them to buy the things they need and want. People spending money is a key factor in determining if a state or country has a good economy. Another economic benefit is less spending on social services. 

In communities, raising the minimum wage is also a tool to combat inequality. Women of color are overrepresented in minimum wage work, and a National Women’s Law Center report shows a direct correlation between a higher minimum wage and a significant decrease in the overall gender pay gap.

Individually, higher wages leave workers with more money to cover emergencies costs like medical bills and vehicle repairs, but also just help them better manage covering necessities. 

 

Why do the GOP oppose a minimum wage increase?

Texas Republicans argue an increase will force small businesses to cut staff and raise their prices. In 2014 remarks associated with President Obama’s minimum wage bill, Ted Cruz saidminimum wage jobs allow people to get their foot on the first rung of the economic ladder, but if the wage increase is passed, many Americans will lose the chance to work altogether.”

“A minimum wage increase doesn’t kill jobs,” said Michael Reich, chair of UC Berkeley’s Center on Wage and Employment Dynamics. “It kills job vacancies, not jobs. The higher wage makes it easier to recruit workers and retain them. Turnover rates go down. Other research shows that those workers are likely to be a little more productive, as well.” 

Reich authored a Berkeley study that found when a $15 minimum wage was offered in other states, teenage workers could work a little less, addressing Republican concern about businesses being forced to lay off workers if wages increase. 

 

Can cities and counties across Texas set their own minimum wage?

Yes. Austin and Houston have increased the minimum wage for city employees. Currently Austin city workers and contractors are paid $20.80 an hour and that should increase to $22 in the future. In Houston, then-Mayor Sylvester Turner signed an executive order in 2022 that increased the minimum wage to $15 an hour for municipal employees, contracted service-related workers, and those who work at the Houston airports. Increases in both cities went into effect in October. 

Dallas City Council approved a plan to gradually increase the minimum wage for city workers and contractors to $15 by 2025, but it has been met with opposition from some businesses. It’s unclear whether the decision will hold. 

 

What’s next in the fight to increase the minimum wage?

Democrats are likely to bring another bill forward proposing an increase in 2025 when the Texas Legislature is back in session.

Meanwhile, Republicans, with the support of business lobbying groups and Gov. Abbott, introduced HB 2127 in 2023 in an effort to put limits on what local government entities could pass. If passed, this would take control away from city and county governments. 

Overall, it’s likely it would take a democratic majority to possibly get any minimum wage increase bills passed.

 

What are some Texas advocacy groups fighting for a higher minimum wage?

Check out Texas Appleseed, Texas Organizing Project, Tarrant4Change, and Somos Tejas to see the work they’re doing around wage equity in Texas. 

  • Joi Louviere

    Joi Louviere is the community editor for Courier DFW. She’s a seventh generation Texan and world traveler, passionate about college access, DIY projects and trying out all the coffee shops in Dallas.

CATEGORIES: LABOR

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