RIP federal minimum wage
The federal minimum wage has all but died of old age.
Why it matters: The benchmark hasn't received a lift in 13 years — it’s been stuck at $7.25 per hour since 2009. The longer it stays there, the less relevance it has, and the closer it comes to meaninglessness.
By the numbers: Measured in 2009 dollars, the minimum wage has fallen over the past 13 years to just $5.27 per hour.
- Most states have a higher minimum wage. The Washington, D.C., wage of $16.10, for instance, is more than double the federal minimum. It's now legal in only 20 states to pay an employee as little as $7.25 per hour.
The big picture: The minimum wage is so low that precious few employers can find anybody willing to work for such a sum.
- The most recent Bureau of Labor Statistics report on the subject finds that just 1.5% of all hourly paid workers are making the minimum wage or less.
Between the lines: The minimum wage doesn't even do much good for the lowest-paid workers. 78% of the 1.1 million workers making at or below the federal minimum were actually making less than the minimum wage in 2020. (That's often legal, thanks to various exclusions and exemptions in the statutes.)
The bottom line: The federal minimum wage is only meaningful insofar as there are workers who would make less than they’re currently earning if it didn’t exist. That population now probably numbers less than 0.2 million people, out of a civilian labor force of more than 164 million.