A History Of The Minimum Wage

The video provides a historical overview of the federal minimum wage in the United States, beginning with its establishment in 1938 when President Franklin Roosevelt signed the Fair Labor Standards Act, setting the wage at 25 cents per hour.

Importantly, the minimum wage is not automatically indexed to inflation; it only increases through congressional and presidential action. Since its inception, the wage has been raised 22 times by the government.

The video also highlights the changing real value of the minimum wage over time by adjusting past wages to today’s dollars, revealing how its purchasing power has fluctuated. Notably, the peak real value of the minimum wage was in 1968, equivalent to $10.75 in today’s currency, a time when earning minimum wage could cover a full week’s groceries. In contrast, the current minimum wage falls short of that purchasing power, meaning minimum wage workers today can afford fewer essentials than those in the past.

The video underscores the disconnection between nominal wage increases and true economic value for workers over decades.