Minimum wage has stagnated for 17 years — it’s time for a pay bump

Skip to content

The views expressed by contributors are their own and not the view of The Hill

Housing costs too much. Healthcare costs too much. Childcare costs too much. But for most workers, the most immediate problem is simpler: their paychecks are too low.

America’s affordability crisis is fundamentally a wage crisis, and increasing the minimum wage is the clearest, fastest and most evidence-backed tool available to help the lowest-paid workers. Frozen at $7.25 since 2009, the federal minimum wage has lost 30 percent of its purchasing power, and the 17-year freeze is the longest stretch without an increase since the federal wage floor was established in 1938. The federal minimum wage is at its lowest real value in 77 years.

For nearly two decades, workers and advocates have been pushing for a higher minimum wage. These efforts have been successful across a range of states, especially where strong public support has been mobilized. But Congress has yet to take the necessary steps to raise the incomes of the lowest-paid workers.

A stronger, bolder federal minimum wage would restore a national wage floor that more effectively puts workers within reach of a living wage and eliminates unfair competition based on subpar wages. This means setting the federal minimum wage to two-thirds of the national median wage, which new research from the Economic Policy Institute and the Roosevelt Institute projects would reach about $20 an hour by 2030, raising pay for 40 million workers and their families.

Decades of research now show that higher minimum wages do not produce the mass unemployment economists once warned about. It turns out that businesses adjust in many ways, including through productivity gains, modest price changes, and reduced profit margins. Employment effects show up not as fewer jobs but as lower turnover, which is good for both workers and employers. A federal minimum wage set at two-thirds of the national median would unambiguously help low-wage workers and would not lead to significant job losses. What’s more, it would give higher cost-of-living states and localities ample room to go further.

As for higher costs feared with increased wages, researchers estimate that California’s new fast-food minimum wage, which went from $16 to $20 per hour in 2024, raised fast-food prices by a small percentage — the equivalent of adding 17 cents to a $6 hamburger. Compared to other price increases Americans are experiencing, most obviously the gas price spike stemming from the Iran conflict, a change like this would be modest. Low-wage labor accounts for only a small fraction of total business costs. Large corporations are well-positioned to absorb minimum-wage hikes — in part, by reducing their oversized profits.

The federal minimum wage was created during the New Deal to stop businesses from competing unfairly by driving wages below a basic standard of decency. That principle still matters. When employers build a business model around poverty wages, workers pay the price, and responsible employers are pressured to follow suit.

The result is that far too many workers don’t earn enough to support their families. Further, when workers lack the income to meet basic needs, their reduced purchasing is a drag on the broader economy. For these reasons, Congress should be setting a national wage floor that gets far closer to a living wage.

Addressing the affordability crisis will also require additional policies, such as robust protections for unions, a commitment from macroeconomic policymakers to full employment, and an adequate social safety net. But if you are looking for a single button to press to immediately improve affordability for the largest number of people, raising the minimum wage is right there.

Heidi Shierholz is the president of the Economic Policy Institute. Elizabeth Wilkins is the president and CEO at the Roosevelt Institute

Tags

affordability crisis

cost of living

Heidi Shierholz

Minimum wage

wages

Copyright 2026 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.