Despite boasting the second-largest economy in the United States, Texas remains one of the states adhering to the federal minimum wage of $7.25 per hour. This figure stands in stark contrast to many other states, even those with smaller economies, that have chosen to establish a higher wage floor for their workers. As the cost of living continues to rise, particularly in rapidly growing Texan cities, the question of the minimum wage becomes increasingly pertinent. Why hasn’t Texas, a state known for its economic prowess, increased its minimum wage? Let’s delve into the factors at play and explore how Texas compares to the rest of the nation.
Texas Minimum Wage Stays at Federal Level: $7.25 Hourly
Currently, the minimum wage in Texas is $7.25 per hour, mirroring the federal minimum wage. This has been the federal rate since 2009, and Texas has not enacted any state laws to increase it beyond this level. Interestingly, Texas is unique among the top economic powerhouses in the US in this regard. When examining the states with the largest Gross Domestic Product (GDP), Texas stands out. While California, New York, and Illinois – all ranking in the top five economies – have minimum wages significantly exceeding $13 per hour, Texas remains at the $7.25 mark. Specifically, California’s minimum wage is $16.50, and New York’s is $15.50, highlighting a considerable gap compared to Texas.
texas minimum wage rate
Political Roadblocks: Why Texas Hasn’t Raised the Wage
The stagnation of the minimum wage in Texas is largely attributed to the state’s political landscape. Numerous attempts to raise the minimum wage through legislative bills have been made in recent years, but these efforts have consistently been blocked by conservative lawmakers. The primary concerns voiced by these lawmakers revolve around potential job losses and the risk of increased inflation. They argue that raising the minimum wage would burden businesses, leading to reduced hiring or even layoffs, and that increased labor costs would inevitably be passed on to consumers in the form of higher prices.
Several legislative initiatives aimed at increasing the minimum wage to $15 per hour, such as House Concurrent Resolution 50 (HCR50) in 2023, House Bill 1430 (HB1430) in 2023, HCR 21 in 2021, and HB 255 in 2021, have all been introduced and subsequently failed to pass in the Texas legislature. This repeated failure underscores the strong political resistance to minimum wage increases at the state level.
National Minimum Wage Trends: Texas Trails Behind
Texas’s decision to maintain the federal minimum wage places it among a minority of states. As of 2025, a significant majority of states, 30 in total, have established minimum wages that exceed the federal $7.25 per hour. The national average minimum wage across all states is approximately $9.20, further illustrating that Texas is on the lower end of the spectrum.
Notably, even states that previously adhered to the federal minimum wage are now moving towards higher rates. Missouri and Nebraska, for instance, both recently increased their minimum wages to at least $13.50 in 2024. Nebraska’s experience is particularly interesting, as the state has seen positive economic performance following the wage increase, outperforming national GDP statistics and exceeding its pre-increase growth rates. This suggests that concerns about negative economic impacts from minimum wage increases may not always materialize.
Federal Minimum Wage History and Proposed Changes
The last time the federal minimum wage was increased was in 2009, marking a 15-year period without an adjustment – the longest such period since the Fair Labor Standards Act was enacted in 1938. Recognizing the prolonged stagnation and the increasing cost of living, there have been federal efforts to raise the minimum wage.
Senator Bernie Sanders, a prominent advocate for workers’ rights, introduced the Raise the Wage Act of 2023. This act proposed gradually increasing the federal minimum wage to $17 per hour over five years. While this proposal aimed to significantly improve the financial standing of low-wage workers across the country, it ultimately did not advance through Congress.
City-Level Wage Initiatives in Texas
While Texas state law prevents cities from setting a minimum wage that is higher than the federal level for private employers, some Texan cities have taken steps to improve wages for their own municipal employees. These actions demonstrate a local recognition of the need for higher wages, even within the constraints of state law.
Austin, for example, has successfully raised the minimum wage for city employees to $20 per hour in 2023, up from $15. Similarly, Houston set a $15 per hour minimum wage for all municipal workers in 2021. San Antonio also proposed increasing starting wages for city government employees to $17.50 per hour in 2022 to address staffing shortages. These city-level initiatives reflect a broader trend seen across the nation, where counties and major cities are establishing higher minimum wages for public sector employees to better cope with rising living costs and attract and retain talent. However, it’s important to remember that these increases are limited to city employees and do not extend to the broader private sector within these cities.
In conclusion, the minimum wage in Texas remains at the federal floor of $7.25 per hour due to a combination of political resistance and concerns about potential economic repercussions. This puts Texas in contrast with the majority of US states and even some of its own major cities that are moving towards higher wage standards. As discussions around living wages and economic inequality continue, the debate over the minimum wage in Texas is likely to persist.
