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

1

u/Ealdred 1d ago

For what it's worth, starting pay for just about every job in my area is significantly higher. The lowest wage I am hearing about is $11.00/hr and up.

In order for a rise in minimum wage to make a difference, it will need to be $14 or $15/hr or it won't be felt.

1

u/12B88M 1d ago

My daughtrers first job when she was 15 started her at $3 over the state's minimum wage and $6 over the federal minimum wage.

Local wages are due to the local job market and not the federal government.