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The history of the federal minimum wage in the US (1938-2021)

Below, you can see a chart presenting the federal minimum wage from 1938 to 2021 since the adoption of the Fair Labour Standard Act. The Fair Labor Standards Act of 1938 (29 U.S.C. § 203) is a United States labor law that creates the right to a minimum wage.

This Act became effective on June 25, 1938, and since that time, there was a lot of amendments to improve this act.

The history of the US federal minimum wage (1938-2021)

Initially, the minimum wage was $0.25 since 1938 and was applicable to employees in interstate commerce and the production of goods for interstate commerce industries.

In 1939, the minimum wage was raised to $0.3 and in 1945 it was raised to $0.4. The next big rise was in 1950 when the minimum wage increased to $0.75.

Then, in 1956 the minimum wage was raised to $1.00 and in 1961 the minimum wage was raised to $1.15.

Also, the 1961 Amendments extended the employers and employees that are subject to FLSA, covering large retail and service enterprises as well as to local transit, construction, and gasoline service station employees.

In 1963 the minimum wage was raised to $1.25 and in 1967 it was raised to $1.4. Also, in 1968 it was raised to $1.6.

Also, there was a major amendment in 1966 that extended coverage to State and local government employees of hospitals, nursing homes, and schools, and to laundries, dry cleaners, and large hotels, motels, restaurants, and farms.

Later, the coverage was extended to the remaining Federal, State, and local government employees who were not protected in 1966 and to certain domestic workers in private household employment.

In 1974 there was another raise of federal minimum wage, which became $2.0, and in 1975 it was increased to $2.1.

Once again, in 1976 the federal minimum wage was raised to $2.3 and in 1978 to $2.65.

In 1979 the minimum wage was increased once again to $2.9 and in 1980 and 1981 there were two increases: to $3.1 and $3.35 respectively.

The next major increase happened in 1990 when the minimum wage was increased to $3.8. In 1991 the minimum wage was increased once again, to $4.25.

Since that time, there were only 4 increases.

In 1997 to $5.15, in 2007 to $5.85, in 2008 to $6.55, and in 2009 to $7.25.

The debates around $15 minimum wage

There is now a debate about whether the minimum wage should be raised to $15. In 2021, the Congressional Budget Office released a report estimating that gradually raising the federal minimum wage to $15 an hour by 2025 would benefit 17 million workers, but would also reduce employment by 1.4 million.

However, as we can see from the graph, the minimum wage is now almost 44% behind the peak it reached in 1968.

We can identify 1956-1979 as the years when the minimum wage reached its peak (inflation-weighted), and after 1979 it has been steadily declining, with increases only fixing the situation for a short time.

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