The minimum wage was first enacted in 1938 as part of the Fair Labor Standards Act (FLSA). Initially just 25 cents per hour, it has been raised several times in the decades since. In real (inflation-adjusted) terms, the minimum wage reached its peak in 1968, when it was worth $6.92 in 1998 dollars.
Despite increases in the minimum wage during the 1990s, the buying power of the federal minimum wage has declined by nearly 25 percent over the last 20 years and it has eroded much further since it was last increased over seven years ago. In fact, the prevailing minimum wage is not high enough to afford a two-bedroom home at fair-market rent anywhere in America nor put a family of three over the federal poverty line.
The federal minimum wage is currently $5.15 per hour. In 2004, the Fair Minimum Wage Act was introduced in Congress and would raise the minimum wage to $7.00 per hour over two years. This measure would put money into the hands of 10 – 12 million low-wage workers, bolstering consumer income and spending for workers who do not receive substantial income tax cuts and who need the money the most to provide for their families. Today, the minimum wage is worth only 33 percent of the average American wage, its lowest level since 1949. An increase to the minimum wage is far overdue.
For more information on this issue, visit CHN’s Public Policy Priorities, 2013-2014.
Policy Analyses and Research
- March 5, 2013National Employment Law Project: The Fair Minimum Wage Act of 2013:Restoring the Lost Value of the Minimum Wage Would Boost the Economy and the Incomes of 30 Million Workers in the U.S.
- January 4, 2012EPI: Most Minimum-Wage Workers are Not Teenagers
- October 13, 2011NELP: End the Exclusion of Home Care Workers from Minimum Wage