What changed on 1 February 1967
On 1 February 1967 the federal minimum wage in the United States rose from $1.25 to $1.40 an hour. The increase had been enacted the previous year. President Johnson signed the Fair Labor Standards Amendments of 1966 in September 1966, and the law set a timetable: a first step up in February 1967 and a second, to $1.60, in February 1968 for workers who were already covered.
The change is easy to describe in a sentence, but the more important feature of the law was its reach. The Fair Labor Standards Act, first passed in 1938 with a minimum of 25 cents an hour, had always applied only to certain kinds of employment, mainly work in manufacturing and businesses engaged in interstate commerce. Whole sectors, including agriculture, much of retail and many service jobs, sat outside it. The 1966 amendments pushed the boundaries outward.
Who was brought in
The amendments extended coverage to millions of workers who had never had a federal wage floor. Press and government accounts at the time spoke of about 8 million newly covered employees, though the figure is approximate. They included workers on larger farms, employees of hospitals, nursing homes and schools, laundry and dry-cleaning staff, hotel and restaurant workers, and employees of large retail and service chains. Many of these were women and many were Black workers, particularly in the South, where low-wage agricultural and service work was common.
Newly covered workers did not get the full rate at once. The law set lower starting levels for them, with a schedule of step-ups over several years. Farm workers, for example, were given a lower minimum than other covered employees and were not at first entitled to overtime pay. The details differed by sector, and some groups remained excluded, so the law was a partial rather than complete expansion. The phasing was a compromise, intended to give employers time to adjust and to win enough votes in Congress.
The background
The measure belonged to a wider push for what supporters described as a fairer deal for low-paid workers. The Great Society programmes and the War on Poverty drew attention to the working poor, meaning people who held jobs but did not earn enough to escape poverty. Labour unions backed higher minimums, in part because the wage floor also raised the pay of workers just above it. The previous increase, to $1.25, had been part of 1961 amendments and had taken full effect in 1963. By the mid-1960s, prices had risen enough that the value of that minimum had eroded.
Opposition came from business groups, farm interests and many Southern members of Congress. They argued that a higher minimum, especially when extended to small employers and agriculture, would lead to job losses, particularly among teenagers and less-skilled workers, and that costs would be passed on to consumers. Supporters answered that the evidence did not show large job losses and that the increase would raise purchasing power. Economists have debated this question ever since, and the effects of minimum-wage increases remain contested, with research findings depending on the time, place and method.
What $1.40 an hour meant
It helps to translate the new rate into pay. For a person working 40 hours a week, $1.40 an hour comes to $56 a week before deductions. Over a year of 52 weeks that is $2,912. By comparison, the federal poverty line for a family of four in the later 1960s was roughly $3,400, so even a full-time year at the minimum would leave a family of four below it, and a single earner could not lift a family out of poverty without additional income. A single adult did better, and a family with two earners did better still. Median family income, by contrast, was somewhat under $8,000.
Seen another way, $1.40 was more than five times the original 25 cents of 1938 in dollar terms, but that comparison ignores prices, which had risen a great deal over the intervening three decades.
Effects and later history
The immediate effect of the 1967 increase was modest in most of the economy because the labour market was tight and unemployment was low, at roughly 3.8 percent. Workers in the covered sectors, particularly in low-wage Southern states and in healthcare and hospitality, saw the largest gains. The law gave inspectors a larger area to cover and it made it easier for workers to claim back pay when employers broke the rules.
The step to $1.60 in February 1968 was followed by further increases in the 1970s, as Congress raised the minimum periodically, though not on a fixed schedule. Because the rate was set in dollars and not linked to inflation, its real value tended to fall between legislative changes. The American economy of the 1960s had room for such increases, since growth was strong, though the slowdown and rising prices of 1967 started to put pressure on household budgets.
The 1966 amendments are now remembered less for the headline rate than for the expansion of coverage. They established the principle that the wage floor should apply to workers in services and farm work as well as factories, a change that shaped debates over labour standards for decades. The figures in this article come from commonly cited summaries and are rounded where sources differ.