The federal minimum wage of $7.25 per hour has officially become a poverty wage in 2025, leaving millions of full-time workers struggling to make ends meet. According to new data, annual earnings for workers at this rate now fall below the federal poverty threshold of $15,650 for a single-person household.
Despite a 37% increase in living costs since 2009, when the federal minimum wage was last raised, the rate remains unchanged at $7.25 per hour. Full-time employees working 40 hours weekly at this rate earn just $15,080 annually - nearly $600 below the poverty line.
The impact is particularly severe in 21 states, mainly in the South, where minimum wages match or fall below the federal level. States like Indiana, Pennsylvania, Wisconsin, and Texas have maintained the $7.25 rate, resulting in one in five single-job workers living in poverty.
The stagnant wage has contributed to America's growing homelessness crisis. In 2024, a record 771,480 people experienced homelessness on a single night - an 18% jump from 2023. Between 40% and 60% of these individuals held jobs but still couldn't afford housing.
Economic experts suggest that raising the minimum wage to $15 per hour could help between 1.8 and 3.7 million Americans escape poverty, including up to 1.3 million children. However, during recent congressional hearings, Treasury Secretary Scott Bessent indicated no federal plans to increase the rate, stating minimum wage should be handled at state and regional levels.
The ongoing wage stagnation, combined with rising inflation and limited affordable housing, continues to challenge working Americans' ability to maintain basic living standards. As the gap between minimum wage earnings and poverty threshold widens, the debate over federal wage policy remains at the forefront of national economic discussions.