Here's Why $7.25 Today Is Equivalent To 75 Cents In 1956: Federal Minimum Wage Value Reaches Record Lows

As inflation continues to rise around the nation, the value of the federal minimum wage – $7.25 – continues to drop. The value of $7.25 today is equivalent to the 1956 minimum wage of 75 cents, according to CNBC.

Today’s minimum wage was set in July 2009 and the value of it has fallen 27.4% since then due to soaring inflation. 

There are statistically more Black Americans earning minimum wage than any other minority. Therefore, as the value of the minimum wage decreases, so does the purchasing power of many Black Americans, causing more racial and socioeconomic boundaries.

When the federal minimum wage was increased in February 1968 it was a “huge victory of the civil rights movement,” said Ben Zipper, an economist at the Economic Policy Institute. Yet it has not been increased again in over a decade, impacting many families and individuals.

In 2009, a bill was introduced in Congress that would have increased the federal minimum wage each year according to inflation. The legislation failed, but had it been passed, the minimum wage would be closer to $10 today. 

In addition to a low federal minimum wage, the federal tipped minimum wage has remained at $2.13/hour for 30 years. This applies to any worker who is tipped on a consistent basis, such as a waiter or waitress. 

There are various statewide efforts to increase the minimum wage, such as ones in Nevada, Connecticut and Oregon. States such as New York have already increased its state minimum wage to $13.20.

Overall, it remains clear that inflation is having the biggest impact on Americans who earn the federal minimum wage, and as inflation continues to rise, the value of the federal minimum wage will continue to drop.

Photo: Courtesy of Ehimetalor Akhere Unuabona on Unsplash