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.
FAQ
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