The Federal Minimum Wage Has Been $7.25 Since July 2009

On July 24, 2009, the third and final step of a law passed two years earlier took effect, and the federal minimum wage rose from $6.55 to $7.25 an hour. At the time, the country was in the deepest recession since the 1930s, and the raise was small news. An iPhone was two years old. The Affordable Care Act did not exist yet. A child born that summer is now old enough to apply for a first job, and if that job is in a state that follows the federal floor, the legal minimum it pays is exactly what it was the week the child was born. No other period since the minimum wage was created in 1938 has gone this long without an increase. Nobody voted to freeze it. It froze because nothing could pass.

In short: The federal minimum wage has been $7.25 since July 2009, the longest stretch without a raise in its history, and inflation has eaten roughly a third of its buying power. Most states and many cities have set higher minimums of their own, so the federal floor now binds mainly in about twenty states, many of them in the South and the Plains. The workers still paid at or near it are disproportionately young, part-time, in food service, and women.

How a minimum wage loses value without changing

A minimum wage set in dollars is a promise that shrinks every year prices rise. The $7.25 of 2009 bought noticeably more than $7.25 does now. Using the Bureau of Labor Statistics' consumer price index, a worker would need more than $10 an hour in 2026 to match what $7.25 bought in the summer of 2009. Put the other way, a full-time worker at the federal minimum has taken a pay cut of roughly a third in real terms without ever seeing a smaller number on a pay stub.

This is not a new problem; it is the original design. Unlike Social Security benefits, which have risen automatically with inflation since the 1970s, the federal minimum wage changes only when Congress passes a law. Every increase since 1938 has required a new bill, and the gaps between them have grown longer. Measured in today's dollars, the federal minimum reached its peak in 1968, when it was $1.60 an hour. Since then it has generally drifted down between raises and climbed partway back after each one, but never back to that high-water mark.

The tipped minimum is stranger still. Federal law lets employers pay tipped workers a cash wage of $2.13 an hour as long as tips bring them up to $7.25, and that $2.13 has not changed since 1991.

Why Congress has not acted

There have been plenty of attempts. The most serious came in 2021. The House had passed the Raise the Wage Act in 2019, which would have lifted the federal minimum to $15 in stages, but it went nowhere in a Republican Senate. When Democrats took narrow control of both chambers in 2021, they tried to include a $15 minimum in the American Rescue Plan, the pandemic relief bill they were passing through budget reconciliation, which needs only a simple majority in the Senate.

The Senate parliamentarian advised that the wage increase did not meet the rules for reconciliation, which limit such bills to provisions that are mainly about the budget. Democratic leaders chose not to override her. Senator Bernie Sanders then offered an amendment to bring the increase back, and it failed, with several Democrats joining all Republicans in voting against it. That was the high point of the push, and it fell short inside the majority party.

The arguments against a large federal increase are worth understanding, because they explain why moderates in both parties have hesitated. The country's labour markets differ enormously. A $15 wage in a high-cost metro area is close to the going rate for entry-level work; in a small town with low rents and low prices, it could be well above what most local employers pay. The Congressional Budget Office, in a widely cited 2019 report, estimated that a $15 federal minimum would raise pay for millions of workers and lift more than a million people out of poverty, but would also likely cost some jobs, with its middle estimate at about 1.3 million. Supporters argue the evidence on job losses has been much more reassuring than that, and the debate over that evidence is a story in its own right. But the regional-cost argument is real, and any federal bill that ignores it will have trouble in the Senate, where small rural states carry the same weight as large urban ones.

There have also been bipartisan proposals that went nowhere. In 2021, Senators Mitt Romney and Tom Cotton proposed raising the federal minimum to $10 alongside stricter enforcement of rules against hiring workers without legal status. Democrats generally saw the wage too low and the enforcement too costly; many Republicans did not want any increase. It died quietly. The space for a deal has existed for years. Nobody has found the door.

The states filled the gap

While Congress stood still, the action moved down a level. Federal law sets a floor, not a ceiling; states and cities can require employers to pay more, and a majority of states now do. Some have gone much further than anyone in Washington proposed.

Several states, including California, Washington and New York, have minimums well above $15 for some or all workers. Many index their minimum to inflation so it rises every year without a new vote, which is exactly the fix the federal floor lacks. Large cities, from Seattle to Denver, have set their own rates above their states'.

What may surprise readers is how much of this happened through ballot measures in states that vote Republican for president. Arkansas, Missouri, Nebraska, South Dakota and Florida have all approved minimum-wage increases at the ballot box in recent years, often by wide margins. Florida voters approved Amendment 2 in 2020, which raised the state's minimum in steps to $15 by September 2026. Missouri voters approved a path to $15 in 2024. Missouri's legislature then voted in 2025 to repeal the measure's automatic annual inflation adjustments and its paid sick leave requirement, a reminder that winning at the ballot box does not end the fight.

The pattern is consistent: when the question is put directly to voters, raising the minimum wage tends to win, including in places where the candidates who oppose it also win. That gap between voters and their representatives is one of the more interesting facts in American politics.

Where $7.25 still binds

The flip side is that about twenty states still use the federal $7.25 as their effective floor, either because their own minimum is the same, because they set a lower one that federal law overrides, or because they have no state minimum wage at all. Most of them are in the South and the Plains, among them Georgia, Texas, Tennessee, Louisiana, Mississippi, Alabama, South Carolina, Kansas, Oklahoma, Idaho, Pennsylvania and North Carolina. Pennsylvania is the outlier there, a large Northern state that has stayed at the federal level despite repeated efforts by its governor and the state House.

In those states, a wage of $7.25 is not a curiosity. It is the bottom rung of a labour market that is also shaped by it. Even where few people earn the minimum exactly, a low legal floor tends to hold down wages just above it.

Who still earns the federal minimum

Each year the Bureau of Labor Statistics reports on hourly workers paid at or below the federal minimum. The numbers have fallen as states raised their own floors and as tight labour markets pushed pay up, and the share of hourly workers at or below $7.25 is now around 1 percent. That figure sometimes gets used to argue that the federal minimum no longer matters. It is worth being careful with it.

First, the count includes only workers paid exactly $7.25 or less. It leaves out the much larger group earning just above it, for whom a higher floor would also mean a raise. Second, the count is concentrated. Workers at or below the federal minimum are disproportionately young, part-time and in restaurants and food service, where the tipped wage rule applies. Women are over-represented, and so are workers in the South.

Third, a low share today partly reflects a strong labour market, and labour markets change. A floor matters most in a downturn, when employers have the most power to cut pay. That is the whole reason to have one.

The honest case on both sides

Here is the argument, labelled as such. I think the federal minimum should be raised and then indexed to inflation so this kind of freeze cannot happen again. A floor that is allowed to erode for seventeen years is not really a floor; it is a historical artefact. The evidence from the states that have raised their minimums, much of it studied closely, has generally found that moderate increases raise pay for low-wage workers without the large job losses that opponents predicted.

The strongest counterargument is not that minimum wages always destroy jobs. It is that a single number for a country this varied will be too high in some places and too low in others, and that the costs of setting it too high fall on the least experienced workers, who may find it harder to get a first job. That concern is why some economists who support increases favour a federal floor tied to local wages or living costs, or a smaller federal increase paired with indexing, rather than one dramatic jump.

Progressives sometimes make that conversation harder than it needs to be. Treating every proposal below $15 as a betrayal has kept the federal floor at $7.25 for workers in Mississippi and Georgia for years. A bill that raises the national minimum meaningfully and indexes it, even if it does not hit the number activists set a decade ago, would be a large raise for the workers who are still at the bottom. That is a trade worth weighing honestly.

Why the frozen floor is a choice

A frozen minimum wage is often described as inaction, as if nothing were happening. Something is happening every year: the value of the floor is falling, and the people it protects are getting a little poorer in real terms. That is a policy, even if nobody votes for it.

The new Congress, with Democratic majorities in both chambers, will be sworn in on January 3, 2027. Whether it can move a minimum wage bill, and what the president would do with one, are open questions, and anyone who tells you they know the answer is guessing. What is not in doubt is that the frozen floor has a constituency of its own, the workers who live on it, and they are mostly in places that do not get much attention from either party.

The last raise rode in on a war bill

The story of how $7.25 became law is itself a small lesson in how Washington works. Democrats took control of Congress in January 2007 promising a minimum wage increase, the first since 1997. The House passed a stand-alone bill within days. It then got tangled in Senate negotiations over tax breaks for small businesses, and the increase finally became law in May 2007 as part of a large emergency spending bill that mainly funded the wars in Iraq and Afghanistan. President George W. Bush signed it. The raise came in three steps: $5.85 that July, $6.55 a year later and $7.25 in July 2009.

It is worth pausing on the arithmetic of what that last step buys. A person who works 40 hours a week for all 52 weeks of the year at $7.25 earns $15,080 before taxes. That is below the federal poverty guideline for a single adult with no children in 2025, let alone a parent. Tax credits and benefits can lift a family's resources above that line, which is part of why the earned income tax credit matters so much to low-wage workers. But a full-time job that leaves a single adult below the poverty line on its own is a strange thing for a floor to guarantee.

There is a second lesson in the 2007 law. A minimum wage raise attached to a must-pass bill can succeed when a stand-alone vote fails, but it also leaves no permanent machinery behind. Because the law named three fixed dollar amounts and no formula for what came after, the floor stopped moving the moment the last step took effect.

What you can do

• Check what your state pays. Every state's minimum wage is listed on one page, so you can see whether yours still follows the federal $7.25 and how it compares with your neighbours.
• See the bigger picture of pay at the bottom. The inequality page charts real wages and the minimum wage alongside the wealth shares of the top 1 percent and the bottom half, which helps when someone tells you low-wage workers are doing fine.
• Ask your representatives where they stand on indexing. Indexing is the reform that would end future freezes, and it is easier to win support for than a single dollar figure. Find your House member, senators and state legislators, with their phone numbers and latest votes, through the representatives lookup.
• Follow the cost-of-living fight. Wages are half of the affordability story; rent, groceries and child care are the other half. The affordability and cost of living topic page gathers the reporting in one place.