Red Wine & Blue

Okay, But Why Is Minimum Wage So Low?

Red Wine & Blue Season 6 Episode 13

The federal minimum wage right now is $7.25. For someone working full-time, that translates to $15,060 per year, just $20 over the national poverty line.

The US minimum wage has been hotly debated since its beginning, so this week, we’re taking a closer look at its history, exactly who is making it, and dispelling some misinformation.

In 2023, almost a million hourly workers in the United States made minimum wage or less. And contrary to popular belief, they’re not all teenagers — many are moms earning half of their family’s total income. They’re working jobs you might expect, like retail and food service, but also jobs you might not have expected, like home healthcare workers. And here’s something important to know: the minimum wage doesn’t automatically increase with inflation. It has to be intentionally raised by Congress, something that hasn’t happened since 2009. Think about how much prices have gone up since then! 

It doesn’t have to be this way. If we look at other countries around the world, or even America a few decades ago, we can see that wealth inequality has never been this bad. It’s not a fact of life; it’s not a necessary evil to have a good economy. It can change if we all talk to our friends and neighbors… and vote accordingly.

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Okay, But Why Is Minimum Wage So Low?

CLIP: “I relied on government assistance to survive. Childcare grants, food stamps, Medicaid, utility assistance, even gas vouchers were absolutely vital and made it possible to use my limited income on rent. Because the rent always eats first. There were days in the month before the food stamp money was replenished that I went to bed hungry or ate very little. After paying bills, I often had no more than $20 left for the month. No matter how hard I worked, it never felt like it was enough. Or even that I was enough. This is the reality for millions of workers in America struggling to survive on minimum wage.”

Narration: The federal minimum wage right now is $7.25. For someone working full-time, that translates to $15,060 per year, just $20 over the poverty line. And honestly, in 2025, that seems overly optimistic - who out there can survive on just 15,000 dollars a year? Thirty states have their own minimum wage that’s higher than $7.25, but for the other twenty states, workers have to make do with barely over 7 dollars an hour. And in Georgia and Wyoming, the state minimum wage is actually less than that: only $5.15. Not every business qualifies to pay their workers below the federal minimum wage, but some do! There are real Americans out there making 5 dollars an hour while billionaires take joyrides into space.

The US minimum wage has been hotly debated since it began, so let’s take a closer look at the history of minimum wage, exactly who is making it, and dispel some misinformation.

In 2023, about 869,000 hourly workers in the United States made minimum wage or less. That’s almost a million workers trying to survive on 7 dollars an hour. And contrary to popular opinion, they’re not all teenagers. In reality, teens aged 16 to 19 make up only about ten percent of workers making minimum wage or less. Two-thirds of minimum wage workers are women, and even more are women of color. They’re working jobs you might expect, like retail and food service, but also jobs you might not have expected, like home healthcare workers.

And if you zoom out just a little bit, beyond the federal minimum wage, almost a third of working Americans in 2023 made less than $25,000 a year. That’s more than minimum wage, but most of us know from experience that it’s definitely not enough to pay rent and buy food, let alone raise a family.

But let’s go back to 1938, when President Franklin Delano Roosevelt introduced the minimum wage to America. In 1900, being a blue collar worker was… bad. Imagine working in a factory for 16 hours a day, 6 days a week, in dangerous and often deadly conditions, and still not being able to afford food and shelter. In 1913, nearly 25,000 Americans died in workplace accidents, and many of those were children because there were no child labor laws. No wonder there were massive worker strikes and protests! 

In the wake of the Great Depression, FDR tried to pass laws for worker protections and higher wages. But the conservative Supreme Court pushed back and it took until the Fair Labor Act of 1938 to finally set a federal minimum wage of 25 cents per hour.

And here’s something important to know: the minimum wage doesn’t automatically increase with inflation. It has to be intentionally raised by Congress, something that hasn’t happened since 2009. Think about how much prices have gone up since then! The average rent has literally doubled, not to mention how expensive groceries and gas and childcare have gotten. And yet through all of that, minimum wage has remained exactly the same. In 1974, minimum wage was 2 dollars an hour. If it kept up with inflation, it would be $12 today. If we instead matched it to worker productivity– how much value we’re generating per hour of work – it would be almost $26 an hour. Just imagine how that would change peoples’ lives.

But would it be bad for business? Honestly, it’s really complicated and you can find economists and real world examples arguing both sides. France has one of the highest minimum wages in the world, and they do also have a very high rate of youth unemployment. The state of Washington, on the other hand, showed an increase in employment after they raised their minimum wage in 2014.

Happy employees are good for business because they’re more productive and less likely to quit. Plus, when workers are paid more, they can spend more – which benefits American businesses.

Either way, we have to do something. The United States has one of the worst wealth inequalities in the world and it’s only been getting worse since the pandemic. It’s hard to even wrap your mind around just how much money is in the hands of the richest few. Elon Musk is currently worth 420 billion dollars – a person earning minimum wage would have to work nonstop for almost 7 million years to earn that much money.
 
And it is really hard to pull yourself out of poverty. It’s like quicksand that pulls you in deeper and deeper. Renters pay more and can’t build wealth through home-ownership, but most people don’t have the money to buy a house - especially not these days! People with low credit scores face higher interest rates and fees. Poor neighborhoods often don’t have grocery stores, which means people end up paying more money for unhealthier food. If you put off seeing a doctor or dentist because you can’t afford it, you end up paying more when you’re forced to deal with an emergency. Or, like a mom named Safiyyah, you sacrifice your own health for your kids.

CLIP: “I only go to the doctor if I need to go, or if I have no other choice to go. I needed a root canal for one of my back teeth, and it was like, around something like 300 dollars. And so I’m like, well, how much would it be to pull the tooth? They were like, oh, it’s free to pull a tooth, but we’d rather not pull the tooth because it’s saveable. And I’m like, well, I’d rather you just pull it, because it’s like, I can’t pay for it. But it’s bothering me and I don’t want the pain, so I’d rather you just pull the tooth. It’s not really what you want to do but it’s what you have to settle for because you can’t afford to get the right dental care.

I want my son to not have to struggle the way I struggle. Because I would rather struggle for him than him struggle for me. I just want… I just want to make it easier for him.”

Narration: Some politicians want to cut programs like Medicare and food assistance - but many recipients, like Safiyyah, are already working full-time. Either we need to pay people more so they don’t need these programs, or we need to expand access. Doing neither is telling millions of families across the country that their lives don’t matter.

How do we fix the enormous gap between the richest few and the rest of us, except through legislation? Do we think Elon Musk or Jeff Bezos will suddenly be inspired to share their wealth? We need to push our politicians to do something, whether it’s a higher minimum wage, better social programs, higher taxes for billionaires, or some combination. The ultra-rich are already looking out for themselves – in fact, the amount of money that billionaires are spending on politics has skyrocketed in the past few years. No wonder Trump’s “big beautiful bill” includes massive tax cuts for the rich!

But here’s the thing: there are more of us than them. Despite their billions of dollars, they still only have one vote each. Hopefully we can change the federal minimum wage, but even if we can’t, many states and even individual towns have their own minimum wage. Figure out who in your community has the power to change it: maybe your city council, or state Congress, or through a ballot initiative. The more local we go, the more powerful we are.

It doesn’t have to be this way. If we look at other countries around the world, or even America a few decades ago, we can see that wealth inequality has never been this bad. It’s not a fact of life; it’s not a necessary evil to have a good economy. It can change if we all talk to our friends and neighbors… and vote accordingly.