Federal Minimum Wage History: 1938 to 2026

Complete Federal Minimum Wage History Table

Every change to the federal minimum wage since the Fair Labor Standards Act of 1938. The inflation-adjusted 2026 equivalent column converts each historical rate to today's dollars using CPI data, showing how the real value of the minimum wage has changed over time.

Inflation equivalents are estimates based on CPI-U data. Actual purchasing power equivalents vary based on the specific goods and services basket used. 2026 equivalent column shows the approximate value in today's dollars, not what that worker could actually buy given changing consumption patterns.

The Fair Labor Standards Act of 1938: Where It All Began

Congress passed the Fair Labor Standards Act on June 25, 1938, establishing for the first time a federal minimum wage, overtime pay requirements, and restrictions on child labor. President Franklin Roosevelt signed it after a multi-year legislative battle. The original minimum wage was $0.25 per hour, which equals roughly $5.50 in 2026 dollars.

The FLSA covered only about 20% of the US workforce at first. Farm workers, domestic workers, and retail employees were excluded. Coverage expanded significantly in subsequent amendments in 1949, 1961, and 1966, broadening the law's reach to tens of millions of additional workers.

The 1938 wage was not arbitrary. It was set at a level that would affect perhaps one-fifth of workers without creating large-scale unemployment in the view of economists advising Congress at the time. The debates about the right level for a minimum wage and the potential employment effects have continued without resolution for the 88 years since.

The 1968 Peak: The Real High-Water Mark

The federal minimum wage reached its highest real value in 1968, when the rate was $1.60 per hour. Adjusted to 2026 dollars, that $1.60 is worth approximately $14.50 today. No subsequent minimum wage increase in nominal terms has come close to restoring that real value.

The late 1960s represented a period of strong labor market conditions, significant union density, and bipartisan political support for wage floor increases. The postwar economic expansion supported wage growth, and Congress passed several FLSA amendments through the 1960s that expanded coverage and raised rates.

Since 1968, inflation has steadily eroded the purchasing power of each subsequent minimum wage increase. Even the 2009 increase to $7.25, which felt like a significant raise in nominal terms, is worth only about $10.50 in 2026 dollars. The gap between the 1968 real peak and today's reality is substantial: a minimum wage worker in 2026 earns about 40% less in real terms than a minimum wage worker at the 1968 peak.

17 Years Without a Federal Increase: 2009 to 2026

The current $7.25 rate has been in place since July 24, 2009. That makes 2026 the 17th consecutive year without a federal minimum wage increase, the longest such period since the FLSA was enacted. For comparison, the previous record freeze lasted from 1981 to 1990: nine years.

During those 17 years, cumulative inflation has reduced the purchasing power of $7.25 by roughly 30%. A worker earning $7.25 today can buy significantly less than a worker earning $7.25 in 2009. In other words, the real minimum wage has been falling for 17 years even while the nominal rate has not changed.

The political stalemate reflects a Congress deeply divided on economic philosophy. Republican-led Senates have consistently blocked House-passed minimum wage bills. Senate rules that allow a minority to block legislation have prevented a simple majority from raising the rate. No mechanism exists to automatically adjust the federal rate for inflation, unlike the CPI-indexing systems adopted by many states.

The result is a bifurcated system: workers in 30 states plus DC earn state minimums above $7.25, while workers in 20 states remain at the federal floor despite 17 years of rising prices.

States Filling the Gap

Because the federal minimum wage has stagnated, states have increasingly taken independent action. In 2009, when the federal rate was last set, very few states had minimums substantially above $7.25. By 2026, thirty states plus DC have minimums above the federal floor, with rates ranging from $8.00 to $17.95.

The state-level increases reflect both political philosophy and economic reality. High-cost states like California, Washington, and New York recognized that $7.25 was wholly inadequate for workers in expensive urban markets. Ballot initiatives have driven increases in Florida, Nebraska, and other states where legislatures had not acted.

The result is a patchwork of minimum wages that vary by as much as $10.70 per hour across state lines. A worker in Mississippi earns $7.25. A worker doing the same job in Washington state earns $17.25. The after-tax difference over a year at full-time hours is more than $20,000 before accounting for cost-of-living differences.

OBBBA 2026: New Federal Policies That Affect After-Tax Pay

While the federal minimum wage itself has not changed in 2026, the One Big Beautiful Bill Act introduced changes that affect after-tax take-home pay for minimum wage workers who work overtime. The overtime premium exemption under OBBBA means that the 50% overtime premium on hours above 40 per week is not counted as federal taxable income up to $12,500 per year for single filers.

For a full-time minimum wage worker at $7.25 who regularly works overtime, the OBBBA exemption can meaningfully increase after-tax pay even though the gross hourly rate has not changed. This represents an indirect improvement to the real value of minimum wage employment for workers who have access to overtime hours.

The OBBBA overtime exemption does not apply to Social Security or Medicare taxes, and four states including Alabama, Colorado, DC, and New Mexico have not conformed their state tax codes to the exemption, so workers in those states still owe state income tax on overtime premiums.

Purchasing Power Analysis: What $7.25 Could Buy vs. What It Buys Now

When Congress set the minimum wage at $7.25 in 2009, that hourly rate could purchase a different basket of goods and services than it can today. Seventeen years of inflation have reduced the real purchasing power of that wage by approximately 30%.

In concrete terms: a gallon of milk that cost around $3.00 in 2009 now costs $4.50 or more. A gallon of gas that averaged around $2.50 in 2009 averaged over $3.50 in 2026. Housing costs have increased even more dramatically. A minimum wage worker in 2009 working 40 hours per week earned $15,080 per year. In 2026, that same $15,080 has the purchasing power of about $10,500 in 2009 dollars.

The practical implication: a worker at the federal minimum wage in 2026 has substantially less real buying power than a worker at the federal minimum wage in 2009, and dramatically less than a worker at the minimum wage in 1968. The nominal wage has never been higher. The real wage has never been lower relative to what it once was.

This purchasing power erosion is one of the core arguments for either raising the federal minimum wage or adopting automatic CPI indexing. Without one of those mechanisms, each passing year makes the $7.25 floor less meaningful in real economic terms.