Final answer:
The lowest hourly amount employers are legally required to pay, known as the minimum wage, was $7.25 per hour in 2016, designed to offer workers a basic standard of living.
Step-by-step explanation:
The lowest hourly amount that employers may pay under federal or state law is called the minimum wage. This is a price floor in the labor market, ensuring workers can earn a basic standard of living. In 2016, the federal minimum wage was $7.25 per hour, providing an annual income of $15,080, which is above the Federal poverty line. However, this amount may not be sufficient as the cost of living increases, prompting some states and localities to set higher minimum wage levels, often referred to as a living wage.