John Schmitt, Center for Economic and Policy Research, March 2012

It is coming up on three years since the last increase in the federal minimum wage–to $7.25 per hour–in July 2009. By all of the most commonly used benchmarks–inflation, average wages, and productivity–the minimum wage is now far below its historical level.

By all of these benchmarks, the value of the minimum wage peaked in 1968. If the minimum wage in that year had been indexed to the official Consumer Price Index (CPI-U), the minimum wage in 2012 (using the Congressional Budget Office’s estimates for inflation in 2012) would be at $10.52. Even if we applied the current methodology (CPI-U-RS) for calculating inflation–which generally shows a lower rate of inflation than the older measure–to the whole period since 1968, the 2012 value of the minimum wage would be $9.22.

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