The minimum wage has never been cut. It has lost half its value anyway.
The federal minimum wage is a fixed dollar amount that only Congress can change. It is not indexed to anything. So between increases it does not hold steady: it quietly falls, because prices keep moving while the number does not. Measured in 2025 dollars, the minimum wage peaked in 1968 at $14.81 an hour. Today's $7.25 buys 51% less than that, and it has now sat unchanged for 16 years.
Nominal versus real, 1938 to 2025
The gray line is the wage as written in law: a staircase that only ever goes up. The teal line is what that wage actually bought, expressed in 2025 dollars. It is a sawtooth, jumping on each increase and sliding between them. The two lines tell opposite stories about the same law.
View as a table
| Effective year | Nominal rate | Value in 2025 dollars |
|---|---|---|
| 2009 | $7.25 | $10.88 |
| 2008 | $6.55 | $9.79 |
| 2007 | $5.85 | $9.08 |
| 1997 | $5.15 | $10.33 |
| 1996 | $4.75 | $9.75 |
| 1991 | $4.25 | $10.05 |
| 1990 | $3.80 | $9.36 |
| 1981 | $3.35 | $11.86 |
| 1980 | $3.10 | $12.11 |
| 1979 | $2.90 | $12.86 |
| 1978 | $2.65 | $13.08 |
| 1976 | $2.30 | $13.01 |
| 1975 | $2.10 | $12.56 |
| 1974 | $2.00 | $13.06 |
| 1968 | $1.60 | $14.81 |
| 1967 | $1.40 | $13.51 |
| 1963 | $1.25 | $13.14 |
| 1961 | $1.15 | $12.39 |
| 1956 | $1.00 | $11.84 |
| 1950 | $0.75 | $10.03 |
| 1945 | $0.40 | $7.16 |
| 1939 | $0.30 | $6.94 |
| 1938 | $0.25 | $5.71 |
What the two lines show
- The peak was 1968, not today. A worker earning the minimum in 1968 was paid $1.60 an hour, worth $14.81 in today's money. Full time, that is $30,805 a year against $15,080 now.
- Erosion does the work of a pay cut, without a vote. The wage has never been reduced in law. Every downward slope on the teal line is inflation, not legislation, which is why a minimum wage that is not indexed falls in real terms by default.
- 16 years is the longest freeze on record. The last increase took effect in 2009. Every previous gap was shorter, and the current one is now longer than the entire span from the first minimum wage in 1938 to 1954.
- The very first minimum wage was worth $5.71 in today's money. The 1938 rate of $0.25 an hour sounds trivially small until it is adjusted, which is exactly the trap in reading any historical wage at face value.
Method
Two series, both computed at build time rather than typed in, so this page cannot drift from its sources and re-bases itself when a new CPI year is published.
real value in 2025 dollars = nominal rate x (CPI in 2025 / CPI in that year)
- Wage. The statutory nonfarm federal minimum for each year, held at its last value until the next change, which is how the law actually works. Drawing a straight line between increases would show a gradual rise that never happened.
- Deflator. CPI-U, all items, not seasonally adjusted, annual averages (1913 to 2025), stored once in the repository so every page that adjusts for inflation uses the same numbers.
- Federal only. State and local minimums, which are higher for most US workers today, are not included. This is the federal floor.
- Index choice matters a little. A different deflator (chained CPI, PCE) shifts the exact figures modestly. The shape of the decline is not sensitive to that choice.
Sources and reuse
- Statutory rates: US Department of Labor, history of federal minimum wage rates, cross-checked against FRED FEDMINNFRWG.
- Inflation: US Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPI-U), all items, not seasonally adjusted (CPIAUCNS), annual averages 1913 to 2025, as at 2026-08-09.
- Nominal history in full: federal minimum wage history.
The underlying figures are US government data. Our compilation and analysis may be quoted freely with credit to CalculatorHub and a link to this page. Reviewed by the CalculatorHub team, edited by James Graham, 9 August 2026. See our methodology. General information, not financial advice.
Frequently asked questions
When was the minimum wage worth the most?
1968. The rate then was $1.60 an hour, which is $14.81 in 2025 dollars once you adjust for inflation using the BLS consumer price index. Today's $7.25 is worth 51% less than that peak, even though the number printed on the law is more than four times larger.
Why does the real line fall when the wage has not been cut?
Because the federal minimum is a fixed dollar amount, not an indexed one. Nothing has to be cut for it to lose value: prices rise while the number stays still. That is why the real line on the chart falls steadily between increases and only jumps when Congress passes a rise. It has now been frozen for 16 years, the longest stretch since the minimum wage began.
What is the minimum wage worth over a full year?
At $7.25 an hour, full-time work of 2,080 hours a year is $15,080 before tax. At the 1968 peak, the equivalent full-time figure in 2025 money was $30,805. That gap, roughly $15,725 a year, is what the erosion is worth to one full-time worker.
Does this account for state minimum wages?
No. This page is the federal floor only. Most US workers now live in a state or city with a higher minimum wage, and where a state rate is higher it is the one that applies. The federal figure still binds in the states that have not set their own higher rate.
Which inflation measure is used?
The Consumer Price Index for All Urban Consumers (CPI-U), all items, not seasonally adjusted, annual averages, index 1982 to 1984 = 100. Values are expressed in 2025 dollars, the latest complete year in the series. Different deflators (chained CPI, PCE) would move the exact figures a little, but not the shape of the decline.