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The Declining Value of the U.S. Federal Minimum Wage
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This graphic illustrates the history of the U.S. federal minimum wage using data compiled by Statista, in both nominal and real (inflation-adjusted) terms. The federal minimum wage was raised to $7.25 per hour in July 2009, where it has remained ever since.
Nominal vs. Real Value
The data we used to create this graphic can be found in the table below.
| Year | Nominal value ($/hour) |
Real value ($/hour) |
|---|---|---|
| 1940 | 0.3 | 6.5 |
| 1945 | 0.4 | 6.82 |
| 1950 | 0.75 | 9.64 |
| 1955 | 0.75 | 8.52 |
| 1960 | 1 | 10.28 |
| 1965 | 1.25 | 12.08 |
| 1970 | 1.6 | 12.61 |
| 1975 | 2.1 | 12.04 |
| 1980 | 3.1 | 11.61 |
| 1985 | 3.35 | 9.51 |
| 1990 | 3.8 | 8.94 |
| 1995 | 4.25 | 8.49 |
| 2000 | 5.15 | 9.12 |
| 2005 | 5.15 | 8.03 |
| 2010 | 7.25 | 10.09 |
| 2015 | 7.25 | 9.3 |
| 2018 | 7.25 | 8.78 |
| 2019 | 7.25 | 8.61 |
| 2020 | 7.25 | 8.58 |
| 2021 | 7.25 | 8.24 |
| 2022 | 7.25 | 7.61 |
| 2023 | 7.25 | 7.25 |
What our graphic shows is how inflation has eroded the real value of the U.S. minimum wage over time, despite nominal increases.
For instance, consider the year 1960, when the federal minimum wage was $1 per hour. After accounting for inflation, this would be worth around $10.28 today!
The two lines converge at 2023 because the nominal and real value are identical in present day terms.
Many States Have Their Own Minimum Wage
According to the National Conference of State Legislatures (NCSL), 30 states and Washington, D.C. have implemented a minimum wage that is higher than $7.25.
The following states have adopted the federal minimum: Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, New Hampshire, North Carolina, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, Wisconsin, and Wyoming.
Meanwhile, the states of Alabama, Louisiana, Mississippi, South Carolina, and Tennessee have no wage minimums, but have to follow the federal minimum.
How Does the U.S. Minimum Wage Rank Globally?
If you found this topic interesting, check out Mapped: Minimum Wage Around the World to see which countries have the highest minimum wage in monthly terms, as of January 2023.
The post Chart: The Declining Value of the U.S. Federal Minimum Wage appeared first on Visual Capitalist.