The federal minimum wage has essentially become an outdated relic. It was last increased to $7.25 on July 24, 2009 - 15 years ago. This matters because, although very few people actually earn $7.25 an hour or less, the federal standard has ripple effects that keep pay low for millions of hourly workers.
Looking at the data, the federal minimum wage is worth less now in inflation-adjusted terms than at any time since 1949. However, workers have managed to get raises without the federal standard moving. In recent years, as the labor market has been tight, employers have been forced to pay more for hourly workers, and an increasing number of states have set higher wage floors.
The number of workers earning $7.25 or less has fallen by nearly half over the past four years, from 1.6 million in 2019 to 869,000 in 2023. Overall, the number of low-wage U.S. workers has decreased, with only 81,000 workers earning exactly $7.25 an hour last year and 789,000 making less than that (many of them tipped workers who earn a different lower minimum wage).
Despite this, economists argue that we still need a federal minimum wage. Any increase in the minimum wage would sweep up millions of workers, as about 17 million people are earning less than $15 an hour. Raising the wage floor to $15 would give all of them a pay boost, and, likely, a wage rise would also push up pay for those earning more than the minimum.
Furthermore, because more women tend to work in low-wage fields, more than twice as many earn the federal minimum wage than men (600,000 women compared to 270,000 men). If the federal minimum wage was raised, women and people of color (who are also disproportionately lower paid) would see the largest wage increases.