Working for the Man

The first federal minimum wage hike in 10 years goes into effect today, raising the hourly earnings of America's lowest paid workers from $5.15 to $5.85. As part of the Fair Minimum Wage Act of 2007, next summer it will rise to $6.55 per hour and in 2009 it will reach $7.25 per hour.

Many states had already raised their own minimum wages since the last federal boost a decade ago, so today's boost won't affect workers in more than half of the U.S. But the 1.7 million people that made $5.15 per hour or less during 2006, according to the Bureau of Labor Statistics, will see an addition to their paychecks.

The minimum wage's effect on unemployment has long been a topic of debate among politicians and economists. Even with the three 70-cent increases already on the books, the nation's lowest earners are likely to remain top of mind during next year's presidential election.

But where do we stand on the minimum wage historically when factoring in inflation? We're better off than we were in 1938, when the U.S. reinstated the legal limit after it was at first declared unconstitutional in 1935. The quarter-per-hour that workers earned then would be worth a measly $3.39 in today's economy.

But we're still behind the level of earnings that the poorest made in 1968, when their $1.60 per hour earnings would have translated to a whopping $9.33 today. No wonder all those kids could afford to get to Woodstock the next year.

And even with today's bump up to $5.85, we haven't caught up with the economy's growth over the last 10 years. If the workers earning $5.15 back in 1997 had received cost-of-living raises along with inflation, their hourly wages would have reached $6.40 by 2006.

Here's a look at historical minimum wages, and how they translate into 2006 dollars.

by Megan Barnett