Current Federal Minimum Wage

Under the Fair Labor Standards Act (FLSA), as of July 24, 2009, the federal minimum wage for non-tipped workers is $7.25 an hour. A full-time, minimum-wage worker earns about $15,000 per year, which is below the federal poverty line for a worker with just one child.

The minimum wage was introduced and passed as part of the FLSA in 1938, at which time it was set at 25 cents an hour. Since that time, the minimum wage has been raised 22 times, but not at the same rate to adjust for inflation. The federal minimum wage reached $1.00/hr in 1956, $2.00/hr in 1974, $3.10/hr in 1980, $4.25/hr in 1991, $5.15/hr in 1997, $5.85/ hr in 2007, $6.55/hr in 2008, and $7.25/hr in 2009. While the cost of living has increased exponentially since 2009, the minimum wage has not been raised in the last seven years, the third longest period of time in history without a minimum wage increase.

Since it was last raised in 2009, the federal minimum wage has lost about 8.1% of its purchasing power due to inflation. Had the minimum wage kept pace with inflation since 1968, when the minimum wage was raised from $1.40 to $1.60 per hour, it would be approximately $11.00/hr, which would mean that a full-time, minimum-wage worker would earn almost $23,000 per year.

Under the FLSA the federal minimum wage for tipped workers is $2.13 an hour. However, the wages plus tips must equal at least $7.25 per hour. If the wages and tips does not equal at least $7.25 per hour, the employer must pay the employee the difference.