Why Isn't Minimum Wage Enough?

The federal minimum wage was enacted through the Fair Labor Standards Act of 1938, which purpose was to eliminate “labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers.” Despite these intentions, the federal minimum wage has failed to keep up with the rising cost of living, and has instead become a wage that keeps working people in poverty.

Although the dollar amount (nominal value) of minimum wage has increased over time, it now takes more dollars to purchase the same goods and services, so the real value of minimum wage has actually decreased since 1960. In 1968, the value of minimum wage was equivalent to $10 today- that’s almost a living wage!

The increase of the federal minimum wage to $7.25 in 2009 was applauded by many, but because of inflation the real value of minimum wage today is still much lower than it ought to be in order the maintain “the minimum standard of living.”


The Fair Labor Standards Act of 1938, U.S. Department of Labor, p. 1.