Minimum Wage in 1965: A Complete Guide

The minimum wage in 1965 stands as a turning point in American labor history. That year was not just about a number on a paycheck. It reflected broader battles for fairness, workers’ rights, and the realities of a changing economy. To understand it properly, we must trace the law, the context, and the ripple effects that followed.

In this article, you will learn what the federal minimum wage was in 1965, how it compared with previous years, how it fit within the civil rights era, how it measured against living costs, how state and provincial wages differed, and what lessons it left for today.

What Was the Minimum Wage in 1965?

In 1965, the federal minimum wage was $1.25 per hour. This rate had been in effect since September 3, 1963, following amendments to the Fair Labor Standards Act (FLSA). It remained in place until February 1, 1967, when Congress raised the wage to $1.40 per hour.

The jump to $1.25 marked a critical increase. At the time, the U.S. economy was expanding, inflation was rising slowly, and debates about fairness in pay were tied to broader questions about civil rights and poverty reduction.

A Quick Timeline Leading Up to 1965

• 1938 – The FLSA created the first federal minimum wage at $0.25 per hour.
• 1956 – Minimum wage rose to $1.00.
• 1961 – Expanded coverage and increased the wage to $1.15.
• 1963 – Minimum wage rose to $1.25.
• 1965 – Workers nationwide earned $1.25 under federal law, though some state and industry exceptions existed.

This steady climb reflected both economic growth and social reform. By the mid-1960s, minimum wage had become an essential policy tool.

The Civil Rights Era and Pay Equity

1965 was also the year of the Voting Rights Act, marches, and a louder national demand for equality. Wage laws were not separate from these struggles. For African American workers, especially in the South, low pay and job discrimination reinforced cycles of poverty.

The federal minimum wage offered at least a floor. However, many agricultural and domestic workers were excluded from coverage. These exclusions disproportionately affected Black and Latino workers, showing the limits of the law in practice.

Cost of Living in 1965

Earning $1.25 an hour may sound small today, but it carried more weight then. Adjusted for inflation, $1.25 in 1965 equals about $12.20 in today’s dollars (using 2024 CPI data).

Some examples of prices in 1965:

• Average new car: $2,650
• Gallon of gasoline: 31 cents
• Loaf of bread: 21 cents
• Monthly rent (average): $118

With these costs, a full-time minimum wage worker making $50 a week could cover basic expenses, but savings and comfort were limited.

How the U.S. Compared Globally

Other countries also experimented with wage floors. For example:

• Canada – Provinces set their own minimum wages. In 1965, rates ranged from around $0.85 to $1.25 per hour, depending on the province.
• United Kingdom – Relied on “Wages Councils” instead of one national minimum.
• Australia – Used an arbitration system to set industry rates, often higher than U.S. standards.

This shows that America’s $1.25 was competitive internationally, though workers abroad in certain systems earned stronger relative protections.

State-Level Variations

While the federal law set $1.25, some states introduced higher wages. For instance, certain industrial states with high living costs pushed above the federal standard. Others, particularly in the South, relied solely on the national floor.

Montana, for example, documented its own wage history through state law. By the mid-1960s, it aligned with the federal level. Manitoba in Canada also had similar adjustments in the same decade, showing a regional trend toward formalizing wage protections.

Economic Growth and Workforce Expansion

1965 was a year of economic boom. Gross Domestic Product grew rapidly. Unemployment remained under 5%. Expansion of manufacturing, education, and healthcare created new middle-class opportunities.

Still, the minimum wage highlighted a divide: while some industries flourished, many workers—particularly women and minorities—remained concentrated in low-wage jobs. The $1.25 rate was progress, but it was not a cure for inequality.

Industries Most Affected

• Retail and service jobs relied heavily on minimum wage workers.
• Manufacturing often paid more than the minimum, but the law set a bottom limit.
• Agriculture and domestic work largely remained outside federal protection.

This selective coverage reveals why many households still struggled despite the 1965 wage increase.

Political Debates of the Time

Raising the wage always sparks debate. In the 1960s, business leaders warned that higher wages would reduce employment. Supporters argued it was essential to keep pace with inflation and poverty reduction.

President Lyndon B. Johnson supported wage increases as part of his “Great Society” programs. His vision linked fair pay with civil rights and anti-poverty efforts.

Inflation and Real Value

Although $1.25 sounds low, the real value of the minimum wage in 1965 was higher than today’s federal rate. Modern workers earning $7.25 per hour (federal minimum since 2009) receive less buying power compared to what $1.25 provided in 1965.

This fact often fuels modern debates: the 1965 worker at minimum wage had stronger purchasing ability than today’s worker under federal law.

Lessons for Today

The history of 1965 shows that:

• Minimum wage is both an economic and social policy.
• Wage increases respond to living costs and political climate.
• Exclusions matter as much as coverage.
• The real value of wages matters more than the number itself.

 

 

Regional Wage Differences in 1965

While the federal rate was $1.25, states had flexibility. Some passed higher wages, while others relied only on federal law.

For example, industrial states like New York and California tested higher wages due to higher living costs. Rural states tended to stick to the federal rate, which was still a big jump for many workers.

In Canada, Manitoba and other provinces raised their own minimum wages in the mid-1960s. Their rates ranged around $1.00 to $1.25, often matching U.S. standards.

This shows that 1965 was a period of alignment across North America.

Minimum Wage and Gender Inequality

Women formed a large share of the low-wage workforce in 1965. They were concentrated in clerical, retail, and domestic jobs.

The $1.25 wage floor applied to some of these roles, but exclusions in law left many women unprotected. Domestic workers, often women of color, earned below federal standards.

This gap between covered and uncovered workers reinforced gender inequality in earnings. It also fueled calls for stronger protections in later years.

Rural and Urban Divides

Urban workers often had higher pay rates due to union influence and industry standards. Rural workers, especially in farming or seasonal jobs, were more likely to fall outside coverage.

In agricultural areas, $1.25 was not guaranteed. That left farm workers vulnerable to inconsistent wages. Many earned well below the federal minimum, which sparked organizing efforts later in the decade.

The divide between city and countryside showed how unevenly minimum wage laws applied.

Youth Employment in 1965

Teenagers and young adults made up a significant portion of minimum wage workers. Retail, fast food, and seasonal jobs often paid $1.25.

For young workers, this provided entry-level experience. But employers sometimes pushed back against extending full wage protections to youth, claiming it discouraged hiring.

This debate—whether young workers should earn less than adults—remains active today.

The Impact on Poverty Programs

President Johnson’s “War on Poverty” programs overlapped with the 1965 minimum wage rate. Community action programs, education funding, and job training all tied into wage policy.

For families at the bottom, $1.25 helped but rarely lifted households above poverty lines. That is why wage increases were paired with food stamps, housing support, and healthcare expansion.

The wage floor alone could not close income gaps. But it was a critical piece in a larger anti-poverty strategy.

The Role of Labor Unions

Unions had a major influence on wage debates in the 1960s. They fought to expand coverage and raise the wage floor.

In 1965, unionized industries often paid above $1.25. But unions still supported higher minimums, because it set a benchmark for non-union jobs.

By backing federal increases, unions ensured that non-union employers could not undercut their members’ wages as easily.

Global Comparisons in Detail

Looking beyond North America, Australia had stronger arbitration systems, setting higher industry wages than the U.S.

In Europe, there was no single model. Britain relied on Wages Councils for different trades. France had regional and sector-specific protections.

The U.S. $1.25 was modest internationally, but its broad national coverage made it a notable model at the time.

Education and Youth Expectations

College attendance grew in the 1960s. Many students worked part-time at minimum wage jobs. For them, $1.25 an hour supported tuition, housing, and books at a time when college was far cheaper than today.

This made the minimum wage part of the education story. For many, a summer job at $1.25 covered a semester’s tuition, something impossible today.

Long-Term Buying Power

Measured against inflation, the 1965 wage had stronger purchasing power than today’s federal minimum. A full-time minimum wage worker could afford rent, groceries, and transportation with fewer hours of labor.

This highlights how the minimum wage has eroded in real value over decades. The 1965 floor gave workers more security compared to the modern equivalent.

Public Opinion in the Mid-1960s

Surveys from the time showed public support for higher wages. Most Americans agreed that $1.25 was fair. Opposition came mainly from business owners worried about costs.

The general public tied fair wages to economic justice. That alignment of opinion made it easier for lawmakers to raise the wage again in 1967.

Wage Law Enforcement

The Department of Labor had to ensure employers actually paid $1.25. Wage and Hour inspectors investigated violations.

Enforcement was difficult in small towns and rural areas. Some employers ignored the law, assuming workers would not complain.

This reality meant that not all workers in 1965 enjoyed the wage floor equally.

Minimum Wage and Racial Equity

Exclusions in the law left many African American and Latino workers uncovered. Farm laborers and domestic workers made up large shares of minority employment in the 1960s.

Without inclusion, the wage law reproduced racial wage gaps. Civil rights leaders pointed out that raising wages without expanding coverage left many behind.

This helped fuel later reforms that brought more categories of workers under the FLSA.

Business Adaptations

Companies adjusted in several ways. Some raised prices slightly to cover higher payroll costs. Others invested in efficiency.

Large retailers and factories could absorb the $1.25 wage more easily. Small businesses struggled, but most survived by adjusting operations rather than cutting jobs.

Contrary to warnings, mass layoffs did not occur after the 1963–1965 increases.

Minimum Wage in Historical Perspective

By 1965, the minimum wage had been around for 27 years. It had grown from $0.25 to $1.25, a fivefold increase.

Each increase reflected not just inflation, but a political decision about fairness. The 1965 level showed how far the U.S. had come since the Depression.

Yet the exclusions and gaps showed how far it still had to go.

Continuing the Debate

The 1965 minimum wage debate foreshadowed today’s struggles. Questions about living wages, youth rates, business costs, and exclusions remain unresolved.

Looking back at 1965 helps us see that the same arguments repeat across decades. The difference now is the scale of inequality.

Conclusion

The minimum wage in 1965 was $1.25 an hour. More than a statistic, it symbolized a moment when America balanced prosperity, social change, and fairness. It did not end poverty, nor did it close all wage gaps, but it marked progress.

Looking back, the 1965 minimum wage reminds us that debates about fairness in pay are not new. They are part of a longer story, one that still shapes today’s struggles for living wages and economic equality.