The rising cost of living has become a central concern for Americans, with everyday expenses, like a cup of coffee, reaching new highs.
Yet, for millions of workers, the federal minimum wage has remained stagnant since 2009. Despite significant inflation over the past 15 years, the federal minimum wage has been stuck at $7.25 per hour, a rate that is insufficient to meet the basic living costs in today’s economy.
In response, many states have taken matters into their own hands by raising their minimum wage, with 21 states implementing increases at the start of 2025.
These state-level adjustments have varied, with some states introducing annual increases through indexing, while others enacted higher wages through voter-approved ballot measures.
States like Alaska, California, Colorado, New Jersey, and Washington are among those that have seen pay bumps, offering workers in those states a step toward addressing the rising cost of living.
The Port Authority Board of Commissioners adopted a new minimum wage policy that brought the wages of airport workers to a minimum of $19.75 per hour as of January 2025, with more raises tied to the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI) getting the wage to $25 in September 2032.
However, the federal minimum wage has not budged for over 15 years, marking the longest period in U.S. history without an increase.
According to data from the U.S. Bureau of Labor Statistics, the federal minimum wage, which peaked in purchasing power in 1968, would be worth $14.76 per hour in 2024 dollars. This underscores the growing gap between the wage floor and the real cost of living in the U.S.
Advocates for a higher federal wage argue that increasing pay at the national level is essential to lifting millions of full-time workers out of poverty.
The Raise the Wage Act of 2023, a proposal that passed the House of Representatives, seeks to gradually raise the federal minimum wage to $17 per hour by 2028 and eliminate the subminimum wage for tipped workers.
U.S. Senator Cory Booker applauded the hourly wage increase for airport service workers but, he is one of the do-nothing Democrats who failed to get the bill a vote in the Senate.
While efforts at the federal level have stalled, the increasing number of states raising their minimum wages is seen as a positive development for workers.
Many business owners also support these changes, noting that higher wages can lead to increased consumer spending, improved employee retention, and stronger local economies.
Mitch Cahn, president of Unionwear, a manufacturing company in New Jersey, highlighted the benefits of paying fair wages, stating, “When wages go up, so does consumer spending and revenues at businesses, helping them to grow and create new quality jobs.”
“For too long, the federal minimum wage has failed to keep pace with the rising costs of living, forcing millions of full-time workers to struggle financially, despite their labor,” said Lisa McCormick, who earned four of ten votes in the primary when she `ran for US Senate in 2018. “By raising the minimum wage, we provide workers with the opportunity to not only lift themselves out of poverty, but also to contribute to a thriving economy through increased consumer spending, enhanced productivity, and stronger communities.”
Nonetheless, the impact of raising the minimum wage remains a subject of debate among economists.
Some studies suggest that higher wages can lead to job losses or higher prices, while others argue that putting more money in workers’ pockets boosts spending and reduces reliance on social services, ultimately benefiting the economy.
Despite these ongoing debates, the contrast between federal and state approaches to minimum wage highlights a growing concern about income inequality.
As costs continue to rise, workers at the lowest pay levels are increasingly burdened, while wealth disparities continue to widen.
Many experts argue that regularly adjusting the federal minimum wage in line with inflation and economic growth is a crucial step toward addressing these issues and ensuring that the U.S. workforce can keep up with the ever-increasing costs of living.
Extensive research refutes the claim that increasing the minimum wage causes increased unemployment and business closures. (See list below with research since the 1990s.)
The buying power of the minimum wage reached its peak in 1968 at $13.86, adjusting for the cost of living in 2022 dollars (U.S. Bureau of Labor Statistics Inflation Calculator).
The unemployment rate decreased from 3.8% in 1967 to 3.6% in 1968 to 3.5% in 1969. The next time the unemployment rate came close to those levels was after the minimum wage raises of 1996 and 1997.
Business Week observed in 2001, “Many economists have backed away from the argument that minimum wage [laws] lead to fewer jobs.”
In the absence of federal action, states are taking on the role of ensuring fair wages for their workers, but the debate over how best to address these disparities at a national level remains unresolved.
With an increasing number of states setting their own minimum wage levels, the question remains: will the federal government catch up, or will the patchwork of state-level adjustments become the new normal for American workers?