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U.S. ECONOMY

Working minimum wage has never been ideal, but it used to be more manageable a half century ago

The federal minimum wage, adjusted for inflation, is at its lowest level in more than a decade and at nearly the same level as in 1954. The height of the minimum wage’s buying power came in 1968, when it was $1.58 an hour, or nearly $12 an hour in today’s dollars. That is $3 less than what Democrats have proposed. Lawmakers removed a $15 an hour wage proposal from the $1.9 trillion stimulus plan in Congress and plan to pursue it later in a separate bill. For the 1.1 million U.S. workers at or below the minimum wage, an increase could bring purchasing power closer to 1968 levels.

The biggest expense for most Americans—housing—is unaffordable for people making the federal minimum wage in some areas, especially those where state governments have already increased the minimum wage above $7.25. This wasn’t the case 50 years ago. With a median rent of $117 a month ($809 in 2021 dollars), minimum-wage earners working 40 hours a week in the Atlanta metro area would have more than half of their pretax wages left over to spend on other things. The equivalent worker today would need a roommate or housing assistance at the state or federal level to have any more income for food and other necessities.

Minimum-wage workers in 1968 paid less for nearly every type of living expense, from food and healthcare to entertainment and larger ticket purchases. Going to the ballpark cost on average $2.44, one-third the price of a ticket today when adjusted for inflation.

Minimum wages above the federal floor have been enacted in 29 states (plus D.C.) ranging from $8.65 in Florida to $15 in the District of Columbia, according to the National Conference of State Legislatures.

Sources: Labor Department (wages, inflation, eggs); Commerce Department (gas, cars); U.S. Census Bureau (rent, mortgage); AAA (gas); Kelley Blue Book (cars); Economic History Association; Statista (baseball); National Association of Theatre Owners (movies); Kaiser Family Foundation (healthcare); The Associated Press (Big Mac): National Conference of State Legislatures (state wages)