Life at Minimum Wage

A chart shows how today's minimum wage increase will help American families get by—but they'll need fairer pay to stay out of poverty.

The lives of 13 million people are going to get a little easier today. They’re the American workers whose earnings will get a boost as the federal minimum wage increases 70 cents today, from $5.15 per hour to $5.85 per hour. The wage will increase an additional 70 cents over the next two years, reaching $7.25 in 2009.

As the chart below shows, today’s minimum wage increase will offer a bit of welcome relief to working families who depend on earnings from minimum-wage jobs. Costs of basic necessities such as food, electricity, and gasoline have increased markedly between 1997—the last time the federal minimum wage went up—and today.

A week of hamburger dinners for a family of four, for example, is roughly $20 more expensive today than it was in 1997—an increase of nearly 40 percent. Before today, minimum-wage earners working to buy hamburger dinners their families would’ve had to work nearly four more hours per week today than they did in 1997 to buy the same meal. After the increase, they’ll be able to work an hour and a half less to feed their families. Take a look at the chart for examples of how the rising wage will make it easier for families to provide for other basic necessities such as electricity and gasoline.

Today’s wage increase is long-overdue progress: before today, the minimum wage was at its lowest level in 50 years. A family of three supported by one minimum-wage earner lived roughly $5,400 below the federal poverty line—earning just $10,700 every year. Now that family will bring in $12,168 before taxes, and when the wage reaches $7.25 in 2009, they’ll earn a little over $15,000. It’s a start, but it’s not enough: the federal poverty level for a family of three is $17,170. More and more generous increases are required to ensure that every American worker earns enough to support his or her family. The United States is the wealthiest country in the world—one in which the phrase "working poor" should not apply to anyone.

Source: U.S. Department of Labor – Bureau of Labor Statistics

For more on this topic, please see:

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.