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Good Graph Friday: Minimum wage is worth less than in 1968

 

If you’re one of the several million Americans earning minimum wage, here's a sobering fact: Your grandpa had more spending power earning minimum wage four decades ago.

Adjusted for inflation, the minimum wage was worth $8.54 per hour in 1968, according to calculations by the Economic Policy Institute. The current minimum wage is $7.25 per hour.

The value of the minimum wage has risen in the last few years, following a three-year government effort to boost the lowest allowable hourly wage in the United States. The final stage, which took effect in July of 2009, brought the minimum wage up nearly 11 percent to its current rate.

In addition, some states have mandated that minimum wage be higher than the national rate.

Still, the data from EPI show that the value of minimum wage has not, in the long-term, kept up with rising inflation, which boosts what things cost and lowers the value of money. (For more fun with inflation, check out this inflation calculator from the Bureau of Labor Statistics.)

About 3.6 million workers earned wages at or below the minimum wage in 2009, according to the Bureau of Labor Statistics. That equates to nearly 5 percent of all hourly paid workers.

People who earn minimum wage are more likely to be under 25 and to have less than a high school diploma, according to the BLS. They also are more likely to work in service occupations such as food preparation. Some of these workers may actually take home more than that base pay, because of tips or commission.