The debate over raising the federal minimum wage has heated up in the past few years.
Those against raising the wage argue that a higher minimum wage could lead businesses to raise their prices or to cut jobs and benefits in an attempt to offset the cost.
Meanwhile, those in favour of raising the wage argue that raising the minimum wage above the current $7.25 per hour federal standard would improve living standards, and would enable consumers to spend more. That increased spending would then give a nice healthy boost to an economy that still shows some slack several years after the Great Recession.
In light of this debate, Pew Research Center shared a chart showing the nominal (non-inflation adjusted) and real (adjusted for inflation to 2014 dollars) federal minimum wage since 1938.
According to the chart, the real federal minimum wage peaked in 1968 at $8.54 in 2014 dollars. Moreover, the Pew report noted, “since it was last raised in 2009, to the current $7.25 per hour, the federal minimum has lost about 8.1% of its purchasing power to inflation.”
And as a final note, the Pew Research report also cited a study from The Economist stating that “one would expect America… to pay a minimum wage around $12 an hour” based on how rich the US is and the pattern among other advanced economies in the OECD.