What do you know about the minimum wage?

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Quick! What is the current minimum wage? If you guessed $8.50, you are wrong! The current minimum wage is $7.25/hour. U.S. labor law, and a range of state and local laws. set the minimum wage in the United States. It was 1912 when the idea of establishing a minimum wage began. In fact, Massachusetts became the first state to pass a minimum wage law.

Since 1938, the federal minimum wage has increased 22 times. Employers generally have to pay workers the highest minimum wage prescribed by federal, state and local law. Since July 24, 2009, the federal government has mandated a nationwide minimum wage of $7.25 per hour. Previous to this, the minimum wage had stalled at $5.15 per hour for 10 years.

Some states and cities have raised their minimum wage even higher.

Attempts to raise the minimum wage at the federal level have been brought to Congress many times. Most recently, the House of Representatives passed its Raise the Wage Act in July of 2019, recommending a jump to $15 per hour by 2025. However, the legislation has not fared well in the Senate. Nevertheless, local governments are filling the void with their own versions of the minimum wage law. For example, excluding Washington D.C.’s $15-per-hour minimum wage, followed by Washington and California at $13.50 per hour and $13 per hour, respectively. The minimum wage in Emeryville, California is $16.30, the highest in the nation. Also worth noting is that New York raised its hourly minimum to $11.80 on Dec. 31, 2019.  

Do you ever wonder what the minimum wage was back in the day? Probably not, but in case you do, wonder no more! Check out the following data:

Year                Minimum wage         Equivalent in 2018 dollars

1940                .30                                           $5.28

1950                .75                                           $7.83

1960                $1                                            $8.39

1970                $1.60                                       $10.46

1980                $3.10                                       $9.96

1990                $3.80                                       $7.43

2000                $5.15                                       $7.54

2010                $7.25                                       $8.28

Source: dollartimes.com

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Harry Pappas Jr. CFP®

Managing Director-Investments

Master of Science Degree Personal Financial Planning
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Pappas Wealth Management Group of Wells Fargo Advisors

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