Minimum Wage: Increasing or Decreasing?

by Categorized: Data, Politics, Poverty Date:

Politicians of all stripes are debating whether the nation can afford another increase in the federal minimum wage, which has been boosted more than a dozen times in the last 45 years and is currently set at $7.25 an hour. But according to some number-crunching by Remapping Debate, a data-driven public policy outfit, the real buying power of the minimum wage has been relatively flat for the last 20 years, and considerably lower than it was for decades after 1968.

As the chart below shows, the 1968 minimum wage of $1.60 amounted to $10.34 in current dollars – which was the peak in buying power for the minimum wage since it was established in 1938. From there, the real value of the minimum wage drifted downward, and since 1990 has fluctuated roughly between $6.50 and $7.50 an hour in 2011 dollars.

Remapping debate also calculated the gap between the inflation-adjusted minimum wage and the current poverty level for a family of four. The adjusted 1968 wage – if paid for 40 hours a week, 52 weeks a year – would provide an annual income 6 percent below the poverty level for  a family of four. In 2011, according to the group’s data, that gap has widened significantly, and a full-time job at minimum wage today would provide an income 34 percent below the poverty level for a family of four.

Click the chart below for more data.

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3 thoughts on “Minimum Wage: Increasing or Decreasing?

  1. Matthew Kauffman Post author

    Hi Carol. The poverty level is set each year by the federal Department of Health and Human Services. For the 48 lower states, the 2011 figure was $22,350 for a family of four. (The 2012 figure is $23,050.)

  2. Wils

    I thought it was determined by each state, or within the confines of each state if it is determined by the Federal government. Our cost of living is high here, but not so high, in, say, South Dakota. So I venture that the poverty rate would be different as well.


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