Sunday, September 21st, 2014
Mostly True
Obama
"The federal minimum wage is worth about 20 percent less than it was when Ronald Reagan" gave his first address to a joint session of Congress.

Barack Obama on Tuesday, January 28th, 2014 in the State of the Union address

Barack Obama says the minimum wage was higher during Ronald Reagan's first State of the Union

During his State of the Union address, President Barack Obama made a pitch for an increase in the minimum wage to $10.10.

"Easy to remember," Obama said of the proposal. (Not quite as catchy as Herman Cain's 9-9-9 plan, but close.)

In trying to gain support from Republicans, Obama invoked their conservative idol.

"Today, the federal minimum wage is worth about twenty percent less than it was when Ronald Reagan first stood here," Obama said of the former president.

It’s a point Obama has tried to make before. We saw him use the comparison last year in a speech on the economy in Galesburg, Ill.

As we noted then, if you compare the minimum wages between the two eras at face value, it’s not close. The minimum wage under all eight years of Reagan’s presidency was $3.35; today the federal minimum wage is $7.25, and has been since 2009.

It’s pretty clear, then, that Obama is referring to the inflation-adjusted minimum wage rate. By that measure, the minimum wage was higher from 1981 to 1984, during Reagan's first term.

How much higher? Using the Bureau of Labor Statistics inflation calculator, we were able to figure that out.

Year Minimum wage Wage in 2013 dollars

Percent difference with current wage

 
1981 $3.35 $8.59 15.6%
1982 $3.35 $8.09 10.4%
1983 $3.35 $7.84 7.5%
1984 $3.35 $7.51 3.5%
1985 $3.35 $7.25 0.0%
1986 $3.35 $7.12 -1.8%
1987 $3.35 $6.87 -5.5%
1988 $3.35 $6.60 -9.8%
1989 $3.35 $6.29 -15.3%
2013 $7.25 $7.25  —

 

In 1981, the minimum wage, adjusted to inflation was $8.61. Today’s mark of $7.25 is 15.6 percent less. That’s not quite 20 percent as Obama said, but it’s in the ballpark (exactly 20 percent less would put today’s minimum wage at $6.87).

But if you take a look, you’ll see that adjusted for inflation, the minimum wage dropped every year of Reagan’s presidency. Today’s minimum wage is 15 percent more than what it was in 1989.

As we pointed out in a previous fact check, Reagan was the only president never to oversee a boost in the minimum wage. So invoking the Gipper to push a minimum wage hike is a tough sell.

We reached out to the White House. They sent us minimum wage figures adusted for inflation similar to what we calculated (about 18.8 percent higher in 1981, by their numbers).

Our ruling

Obama said, "the federal minimum wage is worth about twenty percent less than it was when Ronald Reagan" gave his first State of the Union address. Obama's not far off, but it’s actually closer to 16 percent less.

And using Reagan to make a case to raise the minimum wage should be taken with a grain of salt since the former president never increased it during his two terms. And by Reagan’s last State of the Union, the minimum wage was $2 less than when he first took office, if you factor in inflation.

The statement is largely accurate but needs clarification or additional information, so we rate it Mostly True.

UPDATE, Jan. 29, 2014: After we published this story, an alert reader noted that our original paraphrase of part of Obama's quote was inaccurate. We had written that Obama had said "the federal minimum wage is worth about 20 percent less than it was when Ronald Reagan" gave his first State of the Union address. As the reader pointed out, a new president's first address to a joint session of Congress -- the 1981 speech that Obama was referring to -- is not officially called a State of the Union address. So we have rewritten our paraphrase in the ruling statement above to remove the reference to the State of the Union. It does not affect the rating of Mostly True.