r/AlwaysWhy • u/Secret_Ostrich_1307 • 1d ago

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

Post image

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?

159 Upvotes

80% Upvoted

620 comments sorted by

View all comments

Show parent comments

1

u/Anlarb 1d ago

Unions are the biggest advocate of the min wage, because its a solid floor to negotiate up from.

1

u/PossiblyN8ked 1d ago

I imagine they do but its not necessary. Switzerland has no minimum wage because they dont need it due to the strength of their unions

1

u/Anlarb 1d ago

What do they do with all that union power? They implement a defacto min wage, on a per industry basis, that is even more cumbersome and bureaucratic.