The current federal minimum wage standard in the United States has remained unchanged for 15 years. With inflation intensifying in recent years, some regions have raised their minimum wage standards. However, if the federal government were to follow suit, what should be the minimum wage for Americans?
According to reports from media group Nexstar, the minimum wage standard in some states in the United States has been raised to $17 per hour. Yet, the federal minimum wage standard has not changed in 15 years. The last adjustment was in July 2009, when the federal minimum wage was increased from $6.55 to $7.25. Despite economic booms and recessions, global pandemics, and high inflation since then, the federal minimum wage standard in the United States has remained unchanged, with $7.25 still being the minimum hourly wage in 20 states.
However, in 30 other states and several areas across the U.S., the minimum wage standard is higher. In many states, the minimum wage is actually linked to inflation, meaning it adjusts automatically each year as prices rise. If the federal government were to do the same, how much could American workers earn?
According to data from the Bureau of Labor Statistics, adjusted for inflation, the $7.25 minimum wage in July 2009 would be equivalent to $10.50 in March 2024. This means that for a full-time employee earning the federal minimum wage of $7.25 per hour, their annual income would be around $15,080, just $20 above the poverty line. To keep up with the rising costs of goods and services, the annual salary in 2009 would need to increase to around $21,870 today.
Based on Nexstar’s data, even before the raise in 2009, the upward adjustment of the federal minimum wage did not keep pace with the rising inflation rates. For example, the minimum wage in 1974 was $2, which, adjusted for inflation, should have been $8.86 by 2009 and $12.85 today.
While inflation has eased in some areas, the costs of nearly everything remain high. An analysis at the end of last year even found that most American households would need an additional $10,000 or more to afford the same goods and quality of life as in early 2021.