Minimum Wage If It Had Grown With Productivity Since 1968 (U.S.)

## What this measures

A counterfactual: the 1968 average of the real federal minimum wage (us.minwage.federal_real), multiplied by nonfarm business output per hour in each quarter divided by its 1968 average. The federal minimum wage (fred_fedminnfrwg) is converted to the dollars of the newest month with the CPI-U (fred_cpi, all items, seasonally adjusted). The productivity path starts from the 1968 average of that real minimum wage and grows it with BLS nonfarm business output per hour (fred_ophnfb). Quarterly since 1968.

## Why it matters

It is a common benchmark in the minimum-wage debate: had the floor kept pace with how much an hour of work produces, this is what it would be. Set beside the actual real minimum, the gap shows how far the two have diverged.

## How to read it

The starting year matters. 1968 is the year the federal minimum wage bought the most; a later start gives a smaller gap. The line uses average productivity for all nonfarm business workers.

## What it does not say

It is arithmetic, not a policy estimate: it says nothing about what a higher minimum would do to jobs or prices. The productivity of low-wage jobs may have grown more slowly than the average. Prices are the CPI-U.

## Source

Palanor calculation from U.S. Department of Labor (FEDMINNFRWG) and U.S. Bureau of Labor Statistics (CPIAUCSL, OPHNFB) data, via FRED. Public domain.