Can a Family Survive on the U.S. Minimum Wage?

The federal minimum wage for nonexempt employees in the United States is $7.25 as of 2025. It’s meant to be a living wage but this isn’t the case in practice. The hourly rate hasn’t kept up with the cost of living since 1970. The earnings of a minimum wage worker with a family of four fall well below the poverty line.

On January 1, 2025, 21 states are raising their minimum wages.

Thirty states, the District of Columbia, Puerto Rico, the Virgin Islands, and Guam, have minimum wage rates higher than $7.25 as of 2024.

What Is the U.S. Federal Minimum Wage?  

The federal minimum wage has been $7.25 an hour since 2009.

The minimum wage peaked at an inflation-adjusted value of $12.61 in 2023 dollars in 1970, which was worth 74% more than the federal minimum wage in 2023.

History of the Federal Minimum Wage

The minimum wage has been a political issue since its inception. President Franklin Delano Roosevelt said in 1933, five years before the first minimum wage became law, that “…by living wages, I mean more than a bare subsistence level—I mean the wages of a decent living.” The first U.S. minimum wage was implemented in 1938 as part of the Fair Labor Standards Act.

President Barack Obama signed an executive order to increase the minimum wage of some federal workers to $10.10, reasoning that the overall federal rate should also be raised to that amount. This campaign stalled in Congress but federal inaction prompted many states to legislate their own minimum wage increases.

The U.S. House of Representatives and the Senate both referred the Raise the Wage Act of 2021 to committee in early 2021. The bill is aimed to gradually increase the federal minimum wage to $15 an hour by 2025. It was last introduced in 2019 but it didn’t make it out of committee. The debate about whether to lift the federal minimum wage rages on as a result.

A movement to increase the minimum wage has been largely worker-driven since about 2010. Fast-food and retail workers have staged nationwide walkouts in grassroots efforts to effect change. Home care workers, labor organizations, and women’s groups have also joined the fight.

Minimum Wage by State

Thirty states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands paid more than the federal wage as of 2024.

Individual cities have also taken action. The minimum wage in Seattle is $20.76 as of 2025, more than double the federal minimum.

Florida residents voted to increase the state’s minimum wage incrementally in November 2020, beginning at $10 per hour on September 30, 2021, until it reaches $15 per hour in September 2026.

Voters in the District of Columbia passed a measure in the November 2022 election that will increase the minimum wage for tipped workers, set at $5.05 at the time, until it matches the minimum wage for non-tipped workers by 2027.

Can a Family Survive on Minimum Wage?

A worker with a 40-hour workweek at the federal minimum wage earns just $15,080 a year. This places them almost exactly at the 2024 poverty line for an individual ($15,060) and under the poverty line for a family of two ($20,440). This wage is also well under the poverty line for a family of three ($25,820) and a family of four ($31,200).

Pay Isn’t the Only Problem

Many companies don’t offer full-time hours, even when workers want them. Fluctuating work schedules, split shifts, and the dreaded “clopening” (closing the store at night, then reporting back to work early the next morning to open it, make it difficult for employees to work second jobs, attend college classes, or arrange childcare.

Minimum wage employees are also vulnerable to pay reduction from wage theft, which includes lack of overtime pay, erased time cards, and any unpaid time that employees spend while at work, such as going through lengthy security bag checks.

The Typical Minimum Wage Worker

According to the U.S. Bureau of Labor Statistics (BLS), 80.5 million workers were paid hourly in 2023 (the most recent information), representing more than half (55.7%) of all wage and salary workers in the U.S. Of that group, only 1.1% earned the federal minimum wage or less. About 8 in 10 workers earning the minimum wage or less in 2023 were employed in service jobs, mainly food preparation and serving-related jobs.

About 2% of women and 1% of men who were paid hourly were paid at or below the federal minimum in 2023, according to the BLS. The BLS stated that about 1% of hourly-paid white, Black, Asian, and Hispanic workers earned the minimum wage or less.

Almost 40 million workers would have seen an increase in pay if the Raise the Wage Act had passed and the minimum federal rate had been raised to $15 by the end of 2024, according to the Economic Policy Institute. Workers who would have benefited include:

• 38.6 million adults ages 18 and older
• 23.8 million full-time workers
• 23 million women
• 11.2 million parents
• 5.4 million single parents
• The parents of 14.4 million children

Arguments for and Against Raising the Minimum Wage

Business groups such as the National Retail Federation (NRF) and the National Federation of Independent Businesses (NFIB) opposed the minimum wage increase in the Raise the Wage Act, arguing that it was a one-size-fits-all approach.

It would force businesses to hire fewer people, slash growth plans, and/or raise prices, they argued, adding that the Act would negatively affect early-career and low-wage workers as well as cause harm to the economy in a variety of other ways.

The nonpartisan Congressional Budget Office (CBO) concluded that if the minimum wage reached $15, it would benefit up to 27 million workers. This is significantly fewer than the Economic Policy Institute’s estimate. The CBO also stated it would cost an estimated 1.4 million jobs and that 0.9 million people would see their annual incomes rise above the poverty level.

Groups such as Small Business Majority, Main Street Alliance, and Business for a Fair Minimum Wage support a higher wage, believing that it will inspire employee loyalty and boost workplace morale. This would lead to more satisfied customers and an increase in consumer spending.

Some large U.S. employers that pay an hourly wage have established company-wide minimum wages. They include big retailers such as:

• Amazon: $15 an hour ($18 for new hires)
• Target: $15 to $24 an hour
• Costco: $17 an hour

The Bottom Line

For many, the federal minimum wage in the United States is no longer a living wage. Many states’ minimum wages are more than this amount, but workers continue to struggle to make ends meet.

The federal minimum wage hasn’t budged for over 15 years. It’s still $7.25 per hour. But there’s a growing movement among workers, policy analysts, state and city governments, and even some employers to raise it.