The Federal Minimum Wage

The federal minimum wage began at 25 cents an hour in 1938 and has been raised 22 times by Congress, most recently to 7.25 dollars on July 24, 2009, under a 2007 law. It does not rise automatically with inflation, so its purchasing power has fallen by about 30 percent since 2009 and is well below its peak in 1968. Fewer than 1 percent of hourly workers earn 7.25 dollars or less.

Thirty states and the District of Columbia set higher minimums, and many cities and counties set their own. In 2026, 19 states raised their rates, and statewide minimums top 17 dollars an hour in Washington state, while about 20 states, mostly in the South and Mountain West, still use the federal rate. Many states raise their minimums automatically with inflation, often after ballot measures approved by voters in states of both parties.

Proposals in Congress range from 15 dollars or more an hour, which the House passed in 2019, to more modest increases indexed to inflation, including bills from some Republicans. Supporters say a higher minimum reduces poverty and that research shows small job effects. Opponents say it raises costs for small businesses, leads to fewer jobs and hours for less experienced workers, and should be left to states with different costs of living. The Congressional Budget Office has estimated both income gains and job losses from a 15 dollar minimum.