After inflation, workers on minimum wage haven't made this little since the 1950s
Most Americans weren't born the last time the federal minimum wage bought as little as it does today. It's been nearly 13 years since Congress raised the nation's baseline pay to $7.25 an hour, and that rate is now worth less than at any time in 66 years, a new analysis finds.
Factoring in the latest inflation data, the current value of the U.S. minimum wage in real dollars is at its lowest level since February 1956, when the base U.S. wage was 75 cents (or $7.19 in June 2022 dollars), according to the Economic Policy Institute, a left-leaning think tank that favors raising worker pay.
Meanwhile, workers who earn the federal minimum today earn roughly 27% less in inflation-adjusted terms than their counterparts did in July 2009, the last time Congress enacted an increase, EPI calculated. Americans earning the minimum today are taking in the equivalent of 40% less a similar worker in February 1968, when the value of the base wage was at its peak.
While lawmakers on Capitol Hill haven't raised the federal minimum wage or index it to inflation, 30 states around the country and nearly 50 cities and counties have upped pay for those earning the least.
A dozen states and the District of Columbia mandate wages of at least $15 an hour or higher, and Hawaii lawmakers recently voted to hike the state's minimum to $18 by 2028, EPI noted. Workers in more than 20 states, cities and counties got a wage boost on July 1 as higher minimums kicked in.
Below the poverty line
Still, the base pay's purchasing power in most of those 30 states is below where it was in 1968, when the federal minimum was worth $13.86 in 2022 dollars, according to the U.S. Bureau of Labor Statistics Inflation Calculator.
Minimum-wage workers in 20 states continue to earn $7.25 an hour — a pay rate that is below the poverty line of $8.38 for families of two or more where one person is working. Those 20 states: Alabama, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Wisconsin and Wyoming.
Separately, a survey conducted by Purdue University recently found that Generation Z members — Americans born after 1996 — are struggling the most to feed themselves and their families. About 16% of the country reported experiencing food insecurity in the last 30 days, but 30% of Gen Z adults reported getting free food from a food pantry or charity in the same time frame, according to the monthly poll of more than 1,200 Americans.
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