A Decade In Reverse: Under Current Law, The Federal Minimum Wage Will Be Worth Only $5.99 By 2022
"Indexing” the minimum wage – a key policy reform that establishes automatic annual adjustments to the minimum wage based on the rising cost of living – remains the most effective measure for preventing the purchasing power of the minimum wage from declining each year. Without indexing, the real value of the minimum wage will gradually erode as the cost of basic expenses like food, gasoline, and utilities continues to rise.
Based on current projections of inflation growth over the next ten years, the federal minimum wage will lose nearly 20 percent of its purchasing power by 2022, equaling $5.99 in today's dollars. Unless Congress acts to raise the federal minimum wage and establish automatic annual adjustments to keep pace with the cost of living, the growing number of workers who rely on the minimum wage to make ends meet will find themselves increasingly unable to afford basic expenses, and consumer demand across the economy will remain hampered by stagnant wages.
The federal minimum wage would be $10.58 today if it had kept pace with the rising cost of living since its purchasing power peaked in 1968 - instead, the federal minimum wage remains stuck at $7.25 per hour, which translates to just $15,000 per year for full-time work. For the sake of America's lowest-paid workers - and for the countless businesses across the country whose sales are shrinking because too many consumers cannot afford basic expenses - it's time for Congress to raise the federal minimum wage to a level that recovers its lost purchasing power, and to index the minimum wage to rise automatically with inflation in future years.