When President Joe Biden introduced his new COVID-19 stimulus package in January, he included a plan to raise the federal minimum wage from $7.25/hour to $15/hour.  Once again, the topic of raising the federal minimum wage was a hotly debated topic in American politics.  

The federal minimum wage has not been raised since 2009, but as many states have implemented a higher minimum wage, and after a year of financial turmoil across the country due to the COVID-19 pandemic, many workers are advocating for change at the federal level. This would be an important move towards getting workers in the United States fair compensation.  

However, some push back against a raise of minimum wage due to the belief that it will cause problems for the economy, businesses to shut down, and prices for things such as housing to go up.  Some even argue that the minimum wage should not be a living wage due to the fact that many of those who earn it are students.  Overall, this topic seems like one of those issues that people rarely change their minds on, believing that the statistics back their claim.  In order to make sense of this issue, it is important to look into the history of the minimum wage in the United States.

Before 1938, few states had established a minimum wage, and the era of the industrial revolution had led to many worker strikes in the United States.  Workers would work long hours with little pay as factory owners became rich.  But with the passage of the Fair Labor Standards Act, a federal minimum wage was introduced for the first time, at $0.25/hour.  The federal minimum wage has since been adjusted a number of times and now lies at $7.25/hour.  

Now, this may seem like a positive thing to see the minimum wage has gone up quite a significant amount over the past eighty or so years; however, this is not accounting for one important factor: inflation.  If you were to graph the rise of the minimum wage along with the inflation of the U.S. dollar since 1938, it paints a much clearer picture of how little those earning the wage have benefitted.  In fact, based on real value, the current minimum wage is even worse than it was in 1968, when it was $1.60/hour.  If the federal minimum wage in 1968 had risen along with inflation, it would be around $12/hour today.

Opposition to raising the federal minimum wage has also made the argument that raising the federal minimum wage would be detrimental to the economy, and more specifically, the price of housing.  However, this also seems like an argument that does not hold much weight.  The last time the minimum wage was raised was 2009, and between the years 2010 and 2020, rental prices have increased around thirty-six percent, according to the U.S. Bureau of Labor Statistics. What this means is that the minimum wage has not been raised in the past decade, but in the past decade, housing prices have still increased significantly.  As housing prices have increased, the price of living increases, meaning that people earning a $7.25/hour wage are having a much more difficult time affording housing as long as the federal minimum wage is that low.

Another common argument made against minimum wage is that it should not be a living wage, mainly due to the fact that a lot of minimum wageworkers are students.  While this is true that the bulk of those earning the federal minimum wage are students, this does not negate the fact that there are hundreds of thousands of Americans who are not students but are rather working minimum wage jobs to survive.  Also, the fact that they are students does not mean that they should not be compensated fairly for their work, regardless of their situation.

Nonetheless, it seems unlikely that a raise to the federal minimum wage will end up being included in Biden’s COVID-19 relief plan.  This does not mean, however, that this debate will end any time soon, and people will continue to fight for an increase.