- Today, the federal minimum wage is $7.25, the same rate it’s been since it was last raised in 2009.
- The first federal minimum wage law, enacted in 1938, set minimum hourly rates at $0.25 across the country.
- Though the minimum wage has risen incrementally over the years, it hasn’t increased enough to account for inflation and the skyrocketing costs of living in many places across the US.
- This disparity is clear when you take into account the value of each era’s federal minimum wage in today’s dollars, as well as the prices of common expenses, like a new home and a gallon of gas.
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While 22 states – and Washington D.C – raised their minimum wages in 2020, plenty of others have remained stagnant at the same federal minimum rate that took effect in 2009.
That means right now, 21 states still have a minimum wage of only $7.25. States like Georgia and Wyoming have state minimum wage set at $5.15 which is over two dollars less than the federal minimum, so the latter is enforced.
Despite a September 2019 report by the Federal Reserve Bank of New York that found the minimum wage hike in New York State had no immediate discernible effect on job loss and research published earlier this year suggests that raising the minimum wage by just $1 could lead to a drop in suicide rates, the federally mandated minimum wage hasn’t budged in over a decade.
By observing the changing hourly minimum rates over the years, juxtaposed alongside their relative value in today’s dollars, we can clearly see that incremental increases haven’t been remotely enough to ensure minimum wage workers’ ability to live in today’s economy.
Here's every minimum wage increase, including its value in today's dollars, the cost of a new home in the given year, and the cost of a gallon of gas in the given year.
All adjusted values were determined using the U.S. Bureau of Labor Statistics' CPI Inflation Calculator and are current as of the value of a dollar in June 2020.
1938
The first federal minimum wage (signed into law by President Franklin D. Roosevelt) was $0.25 an hour, effective October 24, 1938. In today's dollars, that's equal to $4.60 an hour.
In 1938, a new house cost about $3,900. A gallon of gas cost $0.20.
Source: US Department of Labor, Business Insider
1939-1945
The federal minimum wage was raised to $0.30 an hour, effective October 24, 1939. It remained the same until October 24, 1945. Thirty cents in 1940 was equal to $5.52 in today's dollars.
In 1940, the median value of a single-family home in the US was $2,938 (equivalent to $54,100.54 in today's dollars). That year, a gallon of gas cost $0.19.
Source: US Department of Labor, US Census Bureau, Energy.gov
1945-1950
The federal minimum wage was raised to $0.40 an hour, effective October 24, 1945. It remained the same until January 25, 1950. Forty cents in 1945 is equal to $5.70 in today's dollars.
In 1950, the median value of a single-family home in the US was $7,354 (equivalent to $80,332.17 in today's dollars). That year, a gallon of gas cost $0.27.
Source: US Department of Labor, US Census Bureau, Energy.gov
1950-1956
The federal minimum wage was raised to $0.75 an hour, effective January 25, 1950. It remained the same until March 1, 1956. In today's dollars, $0.75 in 1954 is equal to $7.19.
In 1954, a gallon of gas cost $0.29. Home value data from the US Census isn't available for this time period.
Source: US Department of Labor, Energy.gov
1956-1961
The federal minimum wage was raised to $1.00 an hour, effective March 1, 1956. In today's dollars, that's equal to $9.62.
In 1960, the median value of a single-family home in the US was $11,900 (equivalent to $104,346.40 in today's dollars). That year, a gallon of gas cost $0.31.
Source: US Department of Labor, US Census Bureau, Energy.gov
1961-1963
The federal minimum wage was raised to $1.15 an hour, effective September 3, 1961. In today's dollars, that's equal to $9.88.
In 1963, the median sales price of newly-constructed homes sold in the US was $18,000 (equivalent to 151,151.34 in today's dollars). That year, a gallon of gas cost $0.31.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1963-1967
The federal minimum wage was raised to $1.25 an hour, effective September 3, 1963. In today's dollars, that's equal to $10.50.
In 1965, the median sales price of newly constructed homes sold in the US was $20,000 (equivalent to $163,162.66 in today's dollars). That year, a gallon of gas cost $0.30.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1967-1968
The federal minimum wage was raised to $1.40 an hour, effective February 1, 1967. In today's dollars, that's equal to $10.97.
In 1967, the median sales price of newly constructed homes sold in the US was $22,900 (equivalent to $179,439.25 in today's dollars). That year, a gallon of gas cost $0.32.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1968-1974
The federal minimum wage was raised to $1.60 an hour, effective February 1, 1968. In today's dollars, that's equal to $12.06.
In 1970, the median sales price of newly constructed homes sold in the US was $23,900 (equivalent to $162,140.74 in today's dollars). That year, a gallon of gas cost $0.35.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1974
The federal minimum wage was raised to $2.00 an hour, effective May 1, 1974. In today's dollars, that's equal to $10.61.
In 1974, the median sales price of newly constructed homes sold in the US was $36,200 (equivalent to $181,208.77 in today's dollars). That year, a gallon of gas cost $0.39.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1975
The federal minimum wage was raised to $2.10 an hour, effective January 1, 1975. In today's dollars, that's equal to $10.39.
In 1975, the median sales price of newly constructed homes sold in the US was $39,000 (equivalent to $192,976.64 in today's dollars). That year, a gallon of gas cost $0.53.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1976-1977
The federal minimum wage was raised to $2.30 an hour, effective January 1, 1976. In today's dollars, that's equal to $10.66.
In 1976, the median sales price of newly constructed homes sold in the US was $44,200 (equivalent to $204,939.34 in today's dollars). That year, a gallon of gas cost $0.57.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1978
The federal minimum wage was raised to $2.65 an hour, effective January 1, 1978. In today's dollars, that's equal to $10.93.
In 1978, the median sales price of newly constructed homes sold in the US was $55,300 (equivalent to $228,098.79 in today's dollars). That year, a gallon of gas cost $0.62.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1979
The federal minimum wage was raised to $2.90 an hour, effective January 1, 1979. In today's dollars, that's equal to $10.95.
In 1979, the median sales price of newly constructed homes sold in the US was $60,600 (equivalent to $228,733.50 in today's dollars). That year, a gallon of gas cost $0.63.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1980
The federal minimum wage was raised to $3.10 an hour, effective January 1, 1980. In today's dollars, that's equal to $10.27.
In 1980, the median sales price of newly constructed homes sold in the US was $63,700 (equivalent to $211,075.44 in today's dollars). That year, a gallon of gas cost $0.86.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1981-1990
The federal minimum wage was raised to $3.35 an hour, effective January 1, 1981. It remained at that level for nearly a decade.
The value of $3.35 in 1981 was equal to the buying power of $9.93 today. The value of $3.35 by 1990 was just $6.78 in today's dollars.
In 1981, the median sales price of newly constructed homes sold in the US was $70,400 (equivalent to $208,608.15 in today's dollars) and a gallon of gas cost $1.19. In 1990, the median sales price of newly-constructed homes sold in the US was $123,900 (equivalent to $250,714.66 in today's dollars) and a gallon of gas cost $1.00.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1990-1991
The federal minimum wage was raised to $3.80 an hour, effective April 1, 1990. In today's dollars, that's equal to $7.60.
In 1991, the median sales price of newly constructed homes sold in the US was $120,000 (equivalent to $229,833.88 in today's dollars). That year, a gallon of gas cost $1.14.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1991-1996
The federal minimum wage was raised to $4.25 an hour, effective April 1, 1991. In today's dollars, that's equal to $8.10.
In 1994, the median sales price of newly constructed homes sold in the US was $130,000 (equivalent to $247,881.73 in today's dollars). That year, a gallon of gas cost $1.11.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1996-1997
The federal minimum wage was raised to $4.75 an hour, effective October 1, 1996. In today's dollars, that's equal to $7.74.
In 1996, the median sales price of newly constructed homes sold in the US was $144,100 (equivalent to $234,227.92 in today's dollars). That year, a gallon of gas cost $1.23.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
1997-2007
The federal minimum wage was raised to $5.15 an hour, effective September 1, 1997. It remained at that level for nearly a decade.
The value of $5.15 in 1997 was equal to the buying power of $8.24 today. The value of $5.15 by 2007 had decreased to just $6.37 in today's dollars.
In 1997, the median sales price of newly-constructed homes sold in the US was $145,000 (equivalent to $231,889.36 in today's dollars) and a gallon of gas cost $1.23. In 2007, the median sales price of newly constructed homes sold in the US was $247,900 (equivalent to $306,730.32 in today's dollars) and a gallon of gas cost $2.80.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
2007-2008
The federal minimum wage was raised to $5.85 an hour, effective July 4, 2007. In today's dollars, that's equal to $7.24.
In 2008, the median sales price of newly constructed homes sold in the US was $226,500 (equivalent to $265,457.17 in today's dollars). That year, a gallon of gas cost $3.27.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
2008-2009
The federal minimum wage was raised to $6.55 an hour, effective July 24, 2008. In today's dollars, that's equal to $7.68.
In 2009, the median sales price of newly constructed homes sold in the US was $214,300 (equivalent to $256,538.85 in today's dollars). That year, a gallon of gas cost $2.35.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov
The federal minimum wage today
Effective July 24, 2009, the federal minimum wage was raised to $7.25 an hour. It hasn't increased in over a decade. Meanwhile, the median sales price of newly constructed homes sold in the US reached an all-time high of $326,400 in 2018.
Source: US Department of Labor, US Census Bureau and US Department of Housing and Urban Development via FRED, Energy.gov