Comparing the minimum wage with the average wage

You’ve likely seen discussions about the minimum wage in the news and in the FRED Blog. We’ve discussed

its value across states
its inflation-adjusted value
its correlation with the shrinking fraction of the labor force earning it
the number of workers paid at or below it
and minimum-wage workers’ demographic profiles

Today, we approach the topic from a different perspective. In the FRED graph above, the blue line tracks the fraction of the average weekly earnings for a person working full-time at the prevailing federal minimum wage. In other words, it shows how the minimum wage compares with the average wage.*
The blue line shoots upward every time Congress raises the federal minimum wage. And we have added a dashed custom line (in purple) to represent the average value of our calculation between January 1964 and January 2021. With a mean value of 44.45%, the hypothetical minimum-wage weekly earnings hit their high point of 57.39% of the

Federal Reserve Source

Author: RealEstate