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
