The U.S. federal minimum wage was raised for the first time in a while in 2007 to $5.85 and then in July, 2008 to $6.55. In 2009, it is scheduled to increase to $7.25. I recently downloaded minimum wage data from the Bureau of Labor and Statistics and graphed changes in the minimum wage over time. I also converted each year's value to Consumer Price Index-adjusted 2008 dollars. From this we see that the minimum wage was actually greatest (in purchasing power) in 1968 (over $10/hr in 2008 dollars), when the actual wage was raised to $1.60/hr. This goes to show the impact of inflation: approximately an order of magnitude reduction in dollar value since 1950.
Thursday, September 18, 2008
Minimum Wage
The U.S. federal minimum wage was raised for the first time in a while in 2007 to $5.85 and then in July, 2008 to $6.55. In 2009, it is scheduled to increase to $7.25. I recently downloaded minimum wage data from the Bureau of Labor and Statistics and graphed changes in the minimum wage over time. I also converted each year's value to Consumer Price Index-adjusted 2008 dollars. From this we see that the minimum wage was actually greatest (in purchasing power) in 1968 (over $10/hr in 2008 dollars), when the actual wage was raised to $1.60/hr. This goes to show the impact of inflation: approximately an order of magnitude reduction in dollar value since 1950.
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