If the US minimum wage had kept up with the economy, many low-wage earners could earn double what they're making now

Justin Sullivan/GettyLow-wage workers could be earning closer to $US20 an hour.
  • Minimum wage is about to go up in many states, but the federal rate is still $US7.25 an hour.
  • The real value of minimum wage peaked in 1968 at $US9.90, adjusted for inflation.
  • Productivity and average wages have grown much faster than minimum wage, which has left low-wage workers behind.

Minimum wage keeps inching up, but it has failed to keep pace with the economy at large.

While 18 states are increasing minimum wage at the beginning of 2018, the federal minimum wage will stay at the same rate it has been since 2009 of $US7.25 an hour.

A chart from The Economic Policy Institute shows how the actual minimum wage has fallen far behind the growth of the economy compared to 50 years ago, when they were practically equal.

The red line shows the actual minimum wage adjusted to 2017 dollars.

The light blue line starts with 1968 – the year the current value of the federal minimum wage peaked at $US9.90, adjusted to 2017 dollars – and shows what minimum wage would be had it kept up with the average wage growth. Had the minimum been adjusted for average growth, today’s minimum wage would be $US11.62.

And the dark blue line shows the federal minimum wage had it grown at the same rate as American productivity, reaching $US19.33 this year, more than double what it actually is.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.