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A 2016 report from the nonpartisan Congressional Research Service shows that inflation-adjusted and nominal minimum wage increased together before 1968, but stopped afterward as inflation eroded the buying power of the minimum wage.
And the last time the federal minimum wage was raised was in 2009, when it increased to its current rate of $7.25 per hour.
Efforts to raise the minimum wage may have stalled at both the federal and state level, but the push for an increase has continued.
President Joe Biden’s plan for a federal minimum wage hike passed the U.S. House earlier this year, but was squashed in the Senate. In Wisconsin, meanwhile, Republicans quickly stripped from the state budget Democratic Gov. Tony Evers’ proposal to raise the minimum wage from $7.25 an hour to $8.60 this year, then to $10.15 in 2024.
Detractors say increasing labor costs would cause companies to reduce their workforce or hire fewer people. Proponents of raising the minimum wage argue the move would lift millions of Americans out of poverty.
One such proponent is Wisconsin Lt. Gov. Mandela Barnes, who recently responded on Twitter to comments from Republican U.S. Sen. Ron Johnson’s about wages rising too much too quickly.
Barnes, who is considering a run against Johnson in 2022, said the senator was right about certain wages rising too quickly — those of the nation’s CEOs, which he said far outstripped wage increases of the average worker. (We rated that claim True.)
Barnes also pointed to the movement of the federal minimum wage over the years.
"To anyone living in fear of the myth of wages growing too quickly, it’s been over 50 years since minimum (wage) and inflation parted ways, then over a decade since the federal minimum went up at all," Barnes tweeted May 23, 2021.
Is he right about that?
Let’s take a look.
We’ll get the simpler part of the claim out of the way first. When was the last time the federal minimum wage increased?
Chet Agni, communications director for the office of the lieutenant governor, cited the Fair Minimum Wage Act of 2007, which Congress passed that year to increase the minimum wage to $7.25 per hour over the course of two years.
The federal minimum wage is still $7.25 per hour, according to the U.S. Department of Labor, so Barnes is one the money for that portion of the claim.
Here, of course, he’s talking about raw dollars — or what is termed the nominal minimum wage. That’s a bit different than what Barnes is talking about when he asserts it’s been 50 years since the minimum wage and inflation parted ways.
But what about that part of the claim?
Let’s start by clarifying what he meant by "parted ways." Agni said Barnes was referring to the point at which the minimum wage stopped increasing on par with inflation.
He cited a February 2021 Forbes piece title "What you need to know about the minimum wage debate." Throughout the 1940s to 1960s, minimum wage increases generally kept pace with inflation, according to the article, but wage growth started slowing after 1968 and fell behind the pace of inflation.
The article references a June 2019 economic snapshot from the left-leaning Economic Policy Institute, which says the federal minimum wage has lost 31% in purchasing power since 1968, when it reached its peak value.
In a 2016 report on indexation and the federal minimum wage from the nonpartisan Congressional Research Service, one can see the inflation and the minimum wage part ways visually. (Indexation adjusts the price or value of something for inflation.)
In a graph using data from the U.S. Department of Labor and Bureau of Labor Statistics, two lines charting the nominal minimum wage, or the rate at which employees were compensated at the time, and the inflation-adjusted minimum wage initially rise together.
The nominal minimum wage was set at 25 cents per hour under the 1938 Fair Labor Standards Act. Using the Bureau of Labor Statistics’ inflation calculator, it can be determined that it equaled $4.31 in 2016 dollars.
Up through 1968, the two lines rise together. As inflation gradually increases, the minimum wage increases too. However, after 1968, the inflation-adjusted value of the minimum wage begins to decline, though the nominal minimum wage — the amount in raw dollars — is still rising.
The inflation-adjusted minimum wage took its sharpest plunge during the 1980s, according to the report, while the nominal minimum wage rose once in 1980 and again in 1981.
Barnes claimed that it’s been over 50 years since the federal minimum wage stopped increasing on par with inflation, and that it’s been over a decade since that minimum wage increased at all.
The inflation-adjusted and nominal minimum wage stopped rising together after 1968, which was 53 years ago. And the federal minimum wage was last raised in 2009.
We rate his claim True.
Mandela Barnes tweet, May 23, 2021
Politico, "8 Democrats defect on $15 minimum wage hike," March 5, 2021
Milwaukee Journal Sentinel, "Wisconsin budget battle begins: GOP lawmakers plan to remove hundreds of items from Gov. Tony Evers' proposal," May 5, 2021
USA TODAY, "$15 minimum wage would boost pay for millions but would cost 1.4 million jobs, report says," Feb. 8, 2021
H.R. 2, Fair Minimum Wage Act of 2007, accessed June 4, 2021
U.S. Department of Labor, Minimum Wage, accessed June 7, 2021
Forbes, "What you need to know about the minimum wage debate," Feb. 26, 2021
Economic Policy Institute, Congress has never let the federal minimum wage erode for this long, June 17, 2019
Congressional Research Service, The Federal Minimum Wage: Indexation, Oct. 26, 2016
Khan Academy, Indexation and its limitations, accessed June 11, 2021
U.S. Department of Labor, History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938 - 2009, accessed June 11, 2021
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