October 01, 2019 Feature

Minimum Wage

Komal Jain

On June 16, 2019, the U.S. minimum wage reached a milestone. It had remained unchanged at $7.25 per hour since July 24, 2009, the longest period it had ever gone without seeing an increase. Congress has increased federal minimum wage rates numerous times since the introduction of the Fair Labor Standards Act (FLSA) in 1938 and the establishment of minimum wage rates to be paid to hourly workers who are not exempt. Although the U.S. House of Representatives in July 2019 passed legislation to gradually increase the federal minimum wage rate to $15 per hour by 2025, it is not expected to pass the Senate at the time of this writing. The cost of living in America has increased in many areas, and the buying power of each earned dollar has decreased via inflation, eroding the value of the $7.25 hourly wage. (The purchasing power of the minimum wage peaked in 1968; that year’s $1.60 minimum would have been worth $11.98 in June 2019, according to the U.S. Bureau of Labor Statistics CPI Inflation Calculator, tinyurl.com/y3xbqdem). However, the inability to fill open positions has driven employers to bring hourly wages up from the minimum, despite a lack of adjustment in the federal minimum rate. For those employers reluctant to pay more, states have exerted their own pressure in larger economic efforts to bring up hourly wages.

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