The States With the Best & Worst Minimum Wages

4th Lowest Minimum Wage: Arkansas

With a minimum wage of $6.25 per hour, applicable only to businesses that employ four or more workers, Arkansas did not start out with the rare distinction of setting its wage floor lower than the federal government’s level. In fact, when it raised its rate from $5.15 to $6.25 in 2007, the move put its wage higher than the federal level for the following two years.

While the rate has remained unchanged since then, rising federal levels have overridden Arkansas’ perceived miserliness for at least a portion of the state's workforce. And though a low unemployment rate of 7.7% in December beat the national average of 8.5% at the time, the state’s 18.7% poverty rate in 2010 was 3.4 percentage points higher than the national average.

3rd Lowest Minimum Wage: Minnesota

At $6.15 per hour, Minnesota goes one step further than Arkansas with its minimum wage, but the story doesn’t end there. Minnesota is one of just three states (along with Oklahoma and Montana) that maintain a two-tiered minimum wage. The $6.15 rate is applicable to businesses with annual receipts higher than $500,000 only; smaller enterprises have a wage floor of $5.25 in the state.

While the unemployment number is subject to a number of factors, minimum wages are part of that story. The situation in Minnesota beats the national level by 2.8 percentage points: The state had unemployment of only 5.7% in December. Combine that with a poverty rate of 11.5% in 2010 – 3.8 percentage points lower than the national average – and it appears as if Minnesota is doing rather well regardless of the levels it has chosen for its minimum wage.