Federal Minimum Wage Has Not Changed in a Decade, and 21 States Still Use It

The federal minimum wage of $7.25 has not changed in a decade, and 21 states without their own minimum wages or with benchmarks lower than the federal standard are currently pegged to that amount.

According to a count from the U.S. Department of Labor, just 29 states plus the District of Columbia exceed the federal minimum wage, which increased to its current rate from $6.55 per hour in 2009.

The value of the federal minimum wage has steadily declined since it was raised that year. And that value, adjusted for inflation, is sharply down from its peak in 1968, when workers earned the equivalent of $10.15 an hour in 2018 dollars, according to the left-leaning Economic Policy Institute (EPI).

While the purchasing power of the minimum wage has fallen around 15 percent after it was increased to its current level, individual states are set to enter the new decade with the largest number of wage increases ever enacted, an analysis from the National Employment Law Project found.

Workers Across The Country Demonstrate For Higher Minimum Wage
Striking McDonald's employees lock arms before being arrested, after walking off the job to demand to $15 per hour wage and union rights during the nationwide "Fight for $15 Day of Disruption" protests on November 29, 2016, in Los Angeles. David McNew/Getty

In 2020, 24 states plus the District of Columbia will see wage increases thanks to previously passed legislation. However, all of these states currently have standards that exceed the federal minimum. On New Year's Eve, New York became the latest state to incrementally raise its minimum wage toward a planned goal of $15 per hour.

Small employers in New York City now have to pay their workers at this rate, leaving just suburban and upstate residents as the remaining workers to see incremental raises over the next several years until their hourly rates hit $15.

Although legislative wage increases are generally supported by Democrats and opposed by Republicans, the Pew Research Center has found that Americans largely support increasing the hourly minimum wage to $15 at the federal level.

In 2017, Pew reported that 52 percent of registered voters back a wage increase to $15. Depending on how it is phased in, such an increase could be among the largest-ever federal minimum wage increases enacted by Congress.

In July, the Democrat-controlled House of Representatives passed the Raise the Wage Act of 2019, which sets a schedule for increasing the federal minimum wage to $15 an hour by 2025. An EPI analysis indicates that 33.5 million workers across the country would see their hourly rates increase under this legislation, and it would raise annual earnings by a collective $92.5 billion.

The bill has not come to a vote in the Senate.

Research has sometimes shown conflicting economic impacts from raising the federal hourly wage. A recent white paper from researchers at the Institute for Research on Labor and Employment at the University of California, Berkeley, found that instituting a $15 minimum would not lead to widespread job losses, as conservative economists warn.

On the other hand, there can sometimes be unintended effects outside of job creation. An April survey from the workplace management company Harri found that 71 percent of restaurants raised menu prices in response to a minimum wage increase. The restaurant industry, which employs a substantial number of minimum wage earners, is uniquely poised to feel the consequences of a wage hike.

Moreover, 64 percent of respondents in the Harri survey said they reduced employee hours, and 43 percent said they cut jobs altogether.

Restaurant workers have attempted to leverage their position as some of the largest stakeholders in the minimum wage fight by pushing for $15 in cities across the country. Nearly every Democrat running for the party's 2020 presidential nomination has called for a $15 nationwide minimum.