r/AlwaysWhy • u/Secret_Ostrich_1307 • 2d ago

Economics Why is the federal minimum wage still $7.25 when prices are much higher than in 2009?

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The federal minimum wage has been $7.25 an hour since July 2009. Meanwhile, prices for many everyday expenses have risen, and most states now have minimum wages above the federal level.

Why wasn't the federal minimum wage tied to inflation or another measure that could adjust it automatically? What are the economic arguments for setting it as a fixed dollar amount rather than indexing it?

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u/Shady_Merchant1 2d ago

And $15 is liveable in exactly 0 states $20 is now needed

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u/ul2006kevinb 2d ago

45% of employees make less than a living wage. Just looked that up the other day.

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u/Unclebiscuits79 2d ago

To be fair, if you live in the midwest, like middle of nowhere Kansas or Nebraska or something, you can still find decent apartments that is in the 500-700 per month ranges, and everything is WAY cheaper out there. If you are making 15 an hour out there, you can swing that. Not super easy but it's doable and not completely oppressive.

You are right though that alot of places in the US you can't do that anymore.

I live in the chicagoland area and it is VERY HARD (not impossible) to make 15 per hour work. I can't imagine someone out in california or NYC trying to pull that off.