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As America’s job market continues to sizzle, conversations around increased compensation are generally getting louder: from bumper pay rises for UPS drivers and American Airlines pilots, to record-breaking $80k salary expectations for workers starting new jobs.
Rampant inflation typically hits low-income households the hardest, leading to some high-profile calls in recent months to up the $7.25 federal minimum wage, which hasn’t been changed since 2009.
The rare minimum
However, the pool of workers that would actually be impacted by amendments to the $7.25 figure has been steadily shrinking ever since it was first implemented 14 years ago. A variety of factors have played a part in what some see as the increasing irrelevance of the federal rate, including states taking matters into their own hands, raising minimums to match inflation, as well as workers demanding higher pay when they returned to a low-wage labor market upended by Covid.
In 2010, 1.8 million workers were taking home $7.25 an hour exactly, while 2.5 million — typically teenagers, workers with disabilities, and tipped staff — were earning less. Last year, those figures had shrunk significantly, with just 141,000 US workers on the federal minimum wage and a further 882,000 falling below that threshold.