The federal minimum wage was established by the Fair Labor Standards Act of 1938 at $0.25 per hour. Since then it has been raised 22 times. The most recent increase was on July 24, 2009, when it rose to $7.25/hr - where it remains in 2026, making this the longest period without a federal increase in the law's history.
Federal Minimum Wage History (Selected Years)
| Year | Rate | Inflation-Adjusted (2026 $) |
|---|---|---|
| 1938 | $0.25 | ~$5.50 |
| 1950 | $0.75 | ~$9.50 |
| 1968 | $1.60 | ~$14.10 (historic peak) |
| 1981 | $3.35 | ~$11.40 |
| 1997 | $5.15 | ~$9.90 |
| 2007 | $5.85 | ~$8.90 |
| 2009 | $7.25 | ~$10.40 |
| 2026 | $7.25 | $7.25 (nominal) |
Inflation-adjusted values are approximate, using CPI data through 2026.
The Purchasing Power Problem
In real (inflation-adjusted) terms, the federal minimum wage peaked in 1968 at approximately $14.10 in 2026 dollars. Today's $7.25/hr has roughly half the purchasing power of the 1968 minimum wage. Workers earning the federal minimum in 2026 can buy significantly less than their counterparts could in 1968.
State Minimum Wage Leaders in 2026
While the federal rate stagnates, many states have moved aggressively higher:
| State | 2026 Rate | Annual Gross | Est. Take Home |
|---|---|---|---|
| Washington | $17.13 | $35,630 | ~$30,300 |
| Connecticut | $16.94 | $35,235 | ~$30,000 |
| California | $16.90 | $35,152 | ~$29,900 |
| Rhode Island | $16.00 | $33,280 | ~$28,920 |
Federal Minimum Wage History (1938–2026)
The federal minimum wage began with the Fair Labor Standards Act of 1938, signed by President Franklin D. Roosevelt. The original rate was just $0.25 per hour. The same law established the 40-hour workweek and set the first federal limits on child labor.
Congress raised the rate steadily for decades: $0.75 in 1950, $1.00 in 1956, $1.60 in 1968, $2.00 in 1974, $3.35 in 1981, $4.25 in 1991, and $5.15 in 1997. In inflation-adjusted terms, the minimum wage reached its highest real value in 1968 - worth more then than it is today.
The most recent increase took effect July 24, 2009, raising the federal minimum to $7.25 per hour. It has stayed there ever since. As of 2026 that is the longest stretch without a federal increase in the law's history - more than 16 years.
Because the federal rate has not moved, states and cities have filled the gap. Thirty states plus the District of Columbia now set minimums above $7.25, and several have reached or passed $15.00. Where a state or local rate is higher than the federal rate, the higher rate applies to covered workers.
How Each Era Changed the Math
The minimum wage started at 25 cents an hour in 1938, covering only about one-fifth of the workforce. Coverage expanded in 1961 and again in 1966, when retail, service, and farm workers were brought under the law - the single largest expansion in its history. The rate climbed steadily through the 1960s and 1970s, roughly tracking inflation, and peaked in real purchasing power in 1968. Since then, increases have come in short bursts separated by long freezes: 1981 to 1990, 1997 to 2007, and 2009 to today.
Those freezes matter because the minimum wage is set in nominal dollars while prices keep rising. A wage that is frozen for a decade quietly loses a quarter or more of its buying power. That erosion is exactly why more than half the states now index their own minimum wages to inflation, adjusting them automatically each January without waiting for legislation. Indexing is the biggest structural change in minimum wage policy since 1938 - it converted an occasional political fight into an annual arithmetic exercise in the states that adopted it.
What History Says About Take-Home Pay
Tax policy has quietly done what Congress has not. Because the IRS standard deduction is indexed to inflation and the federal minimum wage is not, the deduction - $16,100 for a single filer in 2026 - has grown past the $15,080 a full-time federal minimum wage worker grosses in a year. The result is a historical first: federal minimum wage workers owe zero federal income tax, with FICA's 7.65% as their only mandatory federal deduction. In high-wage states the picture differs, since state minimums of $15 to $17 an hour push annual income well above the deduction and back into the 10% and 12% brackets. Our state pages show that math line by line.
Where to Verify Historical Rates
The authoritative record of every federal minimum wage change since 1938 is the U.S. Department of Labor's history table, which lists each rate, its effective date, and the law that enacted it. State historical rates are kept by each state labor department, and many publish decade-by-decade tables. When this page cites a historical rate, it is checked against those primary sources rather than secondary summaries, because rounding errors and misdated changes are common in reposted versions of the table. If you are researching wage history for a claim or a paper, always cite the DOL table directly.
“In 1938 Congress established a minimum wage of $0.25 an hour.”
- Congressional Research Service
FAQ
Calculate your take-home pay at any of these rates using our state-by-state calculator.