History of the Minimum Wage (Infographic)

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Minimum wage has controlled and influenced the world’s economy for over 100 years now, and for good reason. Without minimum wage, employees could be exploited for their services and poverty levels could sky rocket. Nearly every US state has their own minimum wage laws that affect big and small businesses immensely, as reflected with the recent Arizona minimum wage increase. Understanding the history of the minimum wage laws and how the effects of raising pay have shaped our current economy is pivotal in comprehending what changes to expect in the future. With this in mind, you can make the insightful financial decisions to keep your company running smoothly.

Living Wage Laws in the United States

While minimum wage laws have existed for over 100 years, wage laws in the United States have only been around for nearly 80 years. New Zealand was the first country to pass a minimum wage law in 1894, followed by Australia and United Kingdoms in the early 1900’s. The United States was later introduced to this federal law by Franklin Delano Roosevelt in 1938 as part of the Fair Labor Standards Act. The very federal first minimum wage in the US was set at 25 cents an hour, equal to about $4 an hour in today’s economy. However, it should be noted that while the first wage went into effect in 1938, it was not consistent across all industries until 1978.

Currently, due to AZ Prop 206, the state minimum wage has raised to $10 an hour and will continue to grow to $12 by the year 2020. Minimum wage has always been reevaluated to avoid inflation and the poverty level rising, however, it unfortunately often creates unemployment as well. You can examples of this in the past changes of federal wage laws, such as when the first minimum wage law was passed to fight the effects of The Great Depression. Later on, it was changed again during The Great Recession to combat the spike in unemployment rates. These fluctuating wages have and will continue to change the way the economy invests in fast food, local businesses, and the real estate market.

How Minimum Wage Has Changed Over the Years

The following statistics are provided by the US Department of Labor WHD.


  • October 24, 1938 (FDR): $0.25/hr ($4.31/hr in 2017 dollar value)
  • October 24, 1939 (FDR): $0.30/hr ($5.24/hr)
  • October 24, 1945 (Truman): $0.40/hr ($5.40/hr)
  • January 25, 1950 (Truman): $0.75/hr ($7.56/hr)
  • March 1, 1956 (Eisenhower): $1/hr ($8.93/hr)
  • September 3,1961 (Kennedy): $1.15/hr ($9.34/hr)
  • September 3, 1963 (Kennedy): $1.25/hr ($9.92/hr)
  • September 3, 1964 (Johnson): $1.15/hr ($9.01/hr)
  • September 3, 1965 (Johnson): $1.25/hr ($9.64/hr)
  • February 1, 1967 (Johnson): $1.40/hr ($10.18/hr)
  • February 1, 1968 (Johnson): $1.60/hr ($11.17/hr)
  • February 1, 1969 (Johnson): $1.30/hr ($8.60/hr)
  • February 1, 1970 (Nixon) $1.45/hr ($9.08/hr)
  • February 1, 1971 (Nixon) $1.60/hr ($9.59/hr)
  • May 1, 1974 (Nixon): $2/hr ($9.85/hr)
  • January 1, 1975 (Ford): $2.10/hr ($9.48/hr)
  • January 1, 1976 (Ford): $2.30/hr ($9.82/hr)
  • January 1, 1978 (Carter): $2.65 ($9.87/hr)
  • January 1, 1979 (Carter): $2.90/hr ($9.70/hr)
  • January 1, 1980 (Carter): $3.10/hr ($9.14/hr)
  • January 1, 1981 (Carter): $3.35/hr ($8.95/hr)
  • April 1, 1990 (Bush): $3.80/hr ($7.06/hr)
  • April 1, 1991 (Bush): $4.25/hr ($7.58/hr)
  • October 1, 1996 (Clinton): $4.75/hr ($7.35/hr)
  • September 1, 1997 (Clinton): $5.15/hr ($7.79/hr)
  • July 24, 2007 (GW Bush): $5.85/hr ($6.62/hr)
  • July 24, 2008 (GW Bush): $6.55/hr ($7.39/hr)
  • July 24, 2009 (Obama): $7.25/hr ($8.21/hr)

What Minimum Wage Means to Businesses

It’s blatant that the minimum wage has not been steady for many years now and several states are taking it into their own hands to address their personal economy issues. Arizona is not exempt from this and will continue to see wage adjustments within the next decade due to the level of unemployment that will spark from the most recent change. Running a business during this time will be challenging, to say the least, which is why pairing up with a skilled AZ payroll and HR solutions company like PayTech could be incredibly beneficial. Working with professionals who are qualified to assist you with new hires, accounting, and small business tax services can help your company stay financially stable despite whatever federal law changes take place. Get in contact with a PayTech team member to help your business succeed at 602.900.8807.

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