Minimum wage in the United States

In the United States, the minimum wage is set by federal U.S. labor law and a range of state and local laws. The first federal minimum wage was instituted in the National Industrial Recovery Act of 1933, signed into law by President Franklin D. Roosevelt, but later found to be unconstitutional. In 1938, the Fair Labor Standards Act established it at 25¢ an hour ($5.72 in 2025). In 1968, its purchasing power peaked at $1.60 ($14.81 in 2025). As a result of inflation in the decades since, this remains the highest purchasing power the minimum wage has ever had. In 2009, Congress increased it to $7.25 per hour with the Fair Minimum Wage Act of 2007. It has not been increased since.

Employers have to pay workers the highest minimum wage of those prescribed by federal, state, and local laws. As of July 2025, 22 states and the District of Columbia have minimum wages above the federal level. In 2024, 843,000 hourly paid workers earned the federal minimum wage or less, representing 1.0 percent of hourly paid workers. Workers under age 25 accounted for 43 percent of that group, and nearly three quarters worked in service occupations, mostly in food preparation and serving jobs. The estimates exclude overtime pay, tips, and commissions and do not measure coverage under federal, state, or local minimum-wage laws.

In January 2020, almost 90% of Americans earning the minimum wage were earning more than the federal minimum wage due to local minimum wages. In May 2019, nationwide, the average minimum-wage worker earned $11.80 per hour; this was the highest it had been since at least 1994, the earliest year for which effective-minimum-wage data are available.

In 2021, the Congressional Budget Office estimated that incrementally raising the federal minimum wage to $15 an hour by 2025 would impact 17 million employed persons but would also reduce employment by ~1.4 million people. Additionally, 900,000 people might be lifted out of poverty and potentially raise wages for 10 million more workers. Furthermore, the increase would be expected to cause prices to rise and overall economic output to decrease slightly, and increase the federal budget deficit by $54 billion over the next 10 years. An Ipsos survey in August 2020 found that support for a rise in the federal minimum wage had grown substantially during the COVID-19 pandemic, with 72% of Americans in favor, including 62% of Republicans and 87% of Democrats. A March 2021 poll by Monmouth University Polling Institute, conducted as a minimum-wage increase was being considered in Congress, found 53% of respondents supporting an increase to $15 an hour and 45% opposed.