Federal Minimum Wage Real Value Over Time
Federal minimum wage nominal and inflation-adjusted value 1968–2025
| Year | Nominal Min. Wage | In 2025 Dollars | Real Value vs. Peak |
|---|---|---|---|
| 1968 (peak) | $1.60 | $14.09 | Peak real value |
| 1979 | $2.90 | $12.28 | −13% |
| 1990 | $3.80 | $9.15 | −35% |
| 2000 | $5.15 | $9.27 | −34% |
| 2009 | $7.25 | $10.44 | −26% |
| 2015 | $7.25 | $9.40 | −33% |
| 2020 | $7.25 | $8.84 | −37% |
| 2025 | $7.25 | $7.25 | −49% |
If the 1968 minimum wage of $1.60 were adjusted for CPI inflation to 2025, it would be approximately $14.09/hour. The current $7.25 is approximately 49% below this inflation-adjusted 1968 peak. Workers at the federal minimum wage earn about half what their 1968 counterparts did in real purchasing power.
State Minimum Wages: Closing the Gap
States and cities have independently raised minimum wages above the federal floor. California ($16.50/hr), Washington ($16.28/hr), and New York City ($16.50/hr) are among the highest. At $16.50/hr, California’s minimum is still below the inflation-adjusted 1968 federal peak ($14.09) but significantly above the current federal floor. Many states are indexing minimum wages to future inflation to prevent future erosion.
What Inflation Has Done to Entry-Level Pay
At $7.25/hr working 40 hours/week for 52 weeks: $15,080 gross annual income. In 2009 dollars (when $7.25 was set): equivalent to $20,896 purchasing power. By 2025, that same $15,080 buys significantly less in the categories workers spend most on: food, housing, and transportation. Many economists argue $15–$17/hr is the modern equivalent of 1968 minimum wage purchasing power.
Calculate the Real Value of Any Wage
Enter a historical wage and year to see its equivalent in today’s purchasing power.