Inflation and the Real Minimum Wage: A Fact Sheet

Source: Craig K. Elwell, Congressional Research Service, CRS Report for Congress, R42973, January 8, 2014

The Fair Labor Standards Act (FLSA) of 1938 established the hourly minimum wage rate at 25 cents for covered workers.1 Since then, it has been raised 22 separate times, in part to keep up with rising prices. Most recently, in July 2009, it was increased to $7.25 an hour. Because there have been some extended periods between these adjustments while inflation generally has increased, the real value (purchasing power) of the minimum wage has decreased substantially over time.