The federal minimum wage has been eroded by decades of inaction

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The federal minimum wage has been eroded by decades of inaction

Economic Snapshot • By David Cooper • July 25, 2016

This week marks the seven-year anniversary of the last time the federal minimum wage was raised, from $6.55 to $7.25 on July 24, 2009. Since then, the purchasing power of the federal minimum wage has fallen by 10 percent as inflation has slowly eroded its value. However, this decline in the buying power of the minimum wage over the past seven years is not even half the overall decline in the minimum wage's value since the late 1960s. As the figure below shows, at its high point in 1968, the federal minimum wage was equal to $9.63 in today's dollars1. That means that workers at the minimum wage today are paid roughly 25 percent less than their counterparts 48 years ago.