Federal Minimum Wage Hasn't Risen Since 2009. But Our Living Costs Have Soared

The federal minimum wage has not risen since 2009, but that hasn't stopped the cost of living continuing to rise over the past 12 years, leading to higher prices for essential goods and services.

Democrats had hoped to include a minimum wage raise in the most recent round of COVID-19 stimulus. Their plan would have raised the rate from $7.25 an hour to $15, but the Senate parliamentarian ruled the measure could not be included under the rules of budget reconciliation.

The current federal minimum wage came into effect on July 24, 2009. This was the last of three scheduled increases in the rate passed in 2007.

Though there have been no further increases in the federal minimum wage since 2009, the cost of basic goods and services has steadily risen, according to Federal Reserve Economic Data (FRED), an online database operated by the Federal Reserve Bank of St. Louis.

FRED's consumer price indices (CPIs) track changes in the cost of a variety of items in what they describe as "U.S. City Average" using information from the U.S. Bureau of Labor Statistics and other sources.

The data show that the price of all items in U.S. city average had risen more than 23 percent between July 2009 and March 2021.

The cost of some goods and services rose at an even higher rate, with rent of a primary residence and medical care both rising 39 percent during the same period.

The average sales price of a house in the U.S. has fluctuated over the past decade but it was 47 percent higher in the first quarter of 2021 than it had been in the third quarter of 2009, according to FRED figures based on data from the U.S. Census Bureau.

The cost of food and beverages has risen 24 percent since the last minimum wage hike, while the cost of electricity has risen by almost 15 percent in the same timeframe.

The cost of housing, medical care, food and beverages and electricity has increased at a fairly steady rate over the past 12 years but some products, such as gasoline and used vehicles, have been more changeable.

Despite a recent decline in the cost of vehicles, used cars and trucks are still up 23 percent since July 2009, while the cost of new vehicles has risen almost 9 percent.

The CPI for all types of gasoline shows a relatively consistent rise between July 2009 and January 2015, though there were noteworthy dips in the cost of the essential fuel over the period. The cost has continued to be volatile over the past six years but FRED data shows gasoline now costs 20 percent more than it did at the time of the last minimum wage rise.

Raising the minimum wage remains a priority for many Democrats, including President Joe Biden, who recently called for it to be raised to $15 in his first address to a joint session of Congress. However, Democratic Senator Joe Manchin could prove a stumbling block.

Republicans have also appeared divided on the issue, with lawmakers offering two different bills on the matter earlier this year, while others have spoken out against a rise.

Newsweek has asked the White House for comment on this article.

Sign Calling for a $15 Minimum Wage
A woman walks past a large sign during an event commemorating International Women's Day and calling for a $15 minimum wage increase on the National Mall in Washington, DC on March 8, 2021. Federal minimum wage has not increased since July, 2009. ANDREW CABALLERO-REYNOLDS/Getty Images