Taking into account inflation, the federal minimum wage is actually worth less than what it was worth 50 years ago.
Sen. Tina Smith, D-Minn., took to Twitter recently to tout her support for a $15 minimum wage. In the tweet, Smith wrote that "one of the proudest things I did" as lieutenant governor serving under Democratic Gov. Mark Dayton was helping to raise Minnesota’s state minimum wage to $9.50 an hour. "Now, I’m proud to back a bill to raise the minimum wage to $15 per hour by 2024," she wrote, referring to a measure introduced by Sens. Bernie Sanders, I-Vt., and Patty Murray, D-Wash. Currently, the federal minimum wage is $7.25, though states can set higher levels if they wish — and a majority do, from a small amount more than the federal level to $11.50 in Washington state. In a threaded tweet, Smith gave some historical perspective on the minimum wage: "The federal minimum wage hasn’t been raised in a nearly a decade. Taking into account inflation, the federal minimum wage is actually worth less than what it was worth 50 years ago. And prices for everything from milk to prescriptions has skyrocketed." See Figure 1 on PolitiFact.com We wondered if Smith was correct, so we looked at the data. Back in 1968, the minimum wage was set at $1.60. That is equivalent to $11.76 in today’s dollars, which is well above today’s minimum wage level and an all-time high when adjusted for inflation. (We used the Bureau of Labor Statistics’ inflation calculator for this purpose.) Over the last 50 years, the situation in 1968 — greater purchasing power for the minimum wage than today — has been common, though not universal. By contrast, we only found seven years in which today’s minimum wage is able to buy more than a previous minimum wage could. (Those years were 1989, 1995, 2003, 2004, 2005, 2006 and 2007.) Here’s the full chart, with the inflation-adjusted value of the minimum wage shown in red: See Figure 2 on PolitiFact.com All told, then, the minimum wage has been worth more than it is today for 86 percent of the time over the past 50 years, and less than today’s during 14 percent of that time. Our ruling Smith said, "Taking into account inflation, the federal minimum wage is actually worth less than what it was worth 50 years ago." Smith’s strict comparison with 50 years ago is accurate, and her comparison even holds for most years out of the past 50, suggesting that the year she picked is not an unreasonable choice. We rate the statement True. See Figure 3 on PolitiFact.com
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