The lowest hourly rate that an employer must pay an employee. Federal law mandating a minimum wage was first enacted in 1938, when the rate was set at 25 cents an hour. In 2010 the federal minimum wage was $7.25 an hour. Over 32 U.S. states have minimum wage laws that are higher than the federal level. Supporters of a minimum wage law say it reduces poverty. Opponents say it increases unemployment among lower-skilled workers because employers would have to reduce the number of jobs to meet higher wage bills. Some argue that increasing the minimum wage would lead to job losses by prompting factories to move to countries with even lower wages, such as Mexico.