Living Wages Gaining Little Traction in Texas

March 05, 2019 • HR Services Staff

Living Wages Gaining Little Traction in Texas

Living wages, or a wage high enough to maintain a normal standard of living, have gained national attention over the last few years and sparked a review of minimum wage law across the country.

Nationally, 29 states and the District of Columbia have a minimum wage greater than the federal minimum wage of $7.25. In Texas, however, an increase of the minimum wage has gained little traction in the Texas Legislature.

Minimum wage law in Texas

Texas has had a minimum wage preemption law since 2003, which prohibits local governments from establishing a mandatory minimum wage higher than the federal minimum wage. There has been a trend to implement these minimum wage preemption laws across the nation in the last few years. Four years ago, Texas was one of 17 states that attempted to raise the mandatory minimum wage. Since then, an additional eight states have passed minimum wage preemption laws.

As we head into the 86th Texas Legislative Session, we’re already seeing bills propose new minimum wage requirements. State Rep. Ron Reynolds proposed HB 194, which would raise the minimum wage from the current $7.25 an hour to $15.

In the previous session, there were five bills introduced in the House which would have raised the minimum wage. Three of the bills would have raised the minimum wage to $15 per hour. The other two would have raised the minimum wage to $10.10 hour; one within the year and one more gradually reaching a rate of $10.10 in 2022. The five bills were considered collectively at a public hearing in the House business and industry committee. None of the five bills advanced out of committee.

Minimum wages at Texas school districts

While ISDs do not use the term “living wage”, the vast majority of school districts in the state pay a starting wage greater than the federal minimum wage of $7.25/ hour. In particular, the largest districts in the state pay significantly above the federal minimum wage. For the 2017–2018 school years, the minimum starting wage at the twenty largest districts in the state was an average of more than $3 per hour more than the federal minimum wage.

Third party estimates of living wage in Texas

Three of the most widely used living wage calculators provide significantly different living wage rates in Texas. As shown in the chart below, the minimum living wage ranges by over $6 per hour, from $13.29 per hour to $19.51 per hour for the most expensive metro areas in the State and range from $9.79 to $14.00 per hour for the least expensive metro areas in the state. Regardless of which calculator is used, each of them identifies a wage significantly higher than the current Federal minimum wage.

Calculators Living wage calculator—MIT Texas Family Budget Estimator—CPPP Family Budget Calculator—EPI
Lowest metro-area cost of living in Texas $9.79 $9.85 $14.00
Highest metro-area cost of living in Texas $13.29 $15.17 $19.51

*MIT: Massachusetts Institute of Technology, CPPP: Center for Public Policy Priorities, EPI: Economic Policy Institute

Tagged: Compensation, "Pay increases", "Wage and hour"