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If the minimum wage were adjusted for inflation, it would be higher than its current rate. As of 2021, the federal minimum wage in the United States is $7.25 per hour, but if it had kept up with inflation since its peak value in 1968, it would be closer to $12 per hour. Adjusting for inflation is important to ensure that workers’ wages keep pace with the rising cost of living over time. Without such adjustments, the purchasing power of the minimum wage gradually erodes, making it more difficult for low-wage workers to make ends meet.
The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.
At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.