How the wage floor was set, and why it hasn't kept up
The Fair Labor Standards Act of 1938 created the first federal minimum wage at $0.25 an hour, covering a fraction of the workforce. Congress has amended the law repeatedly since, both to cover more workers and to raise the rate, most recently through the Fair Minimum Wage Act of 2007, which phased in three annual increases that landed the wage at $7.25 in 2009. Unlike Social Security benefits, which rise automatically each year through the cost-of-living adjustment, the federal minimum wage has no built-in inflation adjustment. Every increase requires a separate act of Congress, so the real value of the wage rises only in the year of a raise and falls every year after, until the next one arrives.
The 1968 peak
The February 1968 increase to $1.60 an hour landed at the tail end of the postwar economic expansion, when consumer prices were still low relative to wages. Measured in 2026 dollars, no federal minimum wage before or since has bought as much as that 1968 rate. The 1968-to-2026 inflation calculation shows the scale of the gap: prices have risen so much since 1968 that today's nominal wage would need to roughly double to match it.
The rhythm of raises: clusters, then long gaps
Of the 22 intervals between rate changes since 1938, 11 lasted a single year, and most of those cluster in two stretches: the run of nearly annual increases during the high inflation of the mid-1970s, and the three-step phase-in that ended in 2009. The rest of the gaps ran much longer. The longest one on record before the current freeze ran 10 years, from 1997 to 2007; the current gap, 17 years and still running since 2009, has already passed it.
Long freezes did most of the damage
The table below lists every rate change, but the more revealing number is what happened between them. The wage sat at $3.35 for nine years, 1981 to 1990, then at $5.15 for ten years, 1997 to 2007, the longest stretch without a raise until the current one broke that record. Prices did not sit still during either freeze, so the wage's real value fell every single year it went unchanged. The lowest point in the entire 1938–2026 series, though, comes from an earlier and shorter gap: $5.49 in 1948, when the wage had been stuck at $0.40 since late 1945 while postwar prices rose faster than in either later freeze. The current freeze, now 17 years and counting since 2009, is reproducing the same shape: the 2009-to-2026 conversion quantifies exactly how much ground the fixed $7.25 has lost since it took effect.
What filled the gap
With the federal rate frozen, more than thirty states and dozens of cities have set their own minimums above it, some more than double the federal floor, which is why "minimum wage" now means very different things depending on where a worker lives even though the federal number quoted in national statistics hasn't changed since 2009. A companion piece, minimum wage adjusted for inflation, walks through that erosion year by year against the 2009 baseline; this study extends the same math back to the wage's creation in 1938 and adds the 1968 peak and 1948 low that only show up once the whole history is converted to a common year of dollars.
A handful of states go further and tie their minimum wage directly to the CPI, raising it automatically each year the way Social Security's cost-of-living adjustment does. Under that approach, a state's minimum wage never sits still long enough to lose roughly a third of its value the way the federal rate has since 2009; it simply moves with prices every year, by design rather than by the next act of Congress.
Why the low point isn't obvious from the table
The peak and low above come from a year-by-year series, not just the 23 rate-change rows in the table: for every calendar year from 1938 to 2026, the wage in effect on December 31 of that year is converted into 2026 dollars using that year's own average CPI-U. A rate change produces a jump in that series; every year without one produces a small decline, as the same nominal wage buys a little less. The 1948 low falls inside a gap the table shows as a single row, $0.40 effective 1945-10-24, because the erosion happened gradually across the years between changes, not at the moment of any one raise.
Reading the numbers in context
Every conversion here uses the CPI-U annual averages that power the rest of this site, the same series behind the 1981, 1990, and 2009 year hubs, and every pair page between any two years since 1913. That means a claim on this page and the equivalent claim on a pair page will always match; there is no separate dataset to fall out of sync. The full methodology explains how the CPI figures themselves are compiled by the BLS, and the inflation calculator on the homepage runs the identical math for any two years and any starting amount, not just the minimum wage.