The federal minimum wage, established by the Fair Labor Standards Act of 1938, represents the baseline hourly compensation required by law for most U.S. workers. Currently set at $7.25 since July 2009, this rate applies to covered nonexempt employees, affecting approximately 1.1 million workers directly and millions more through wage scale effects. The law includes specific exemptions for certain employees: tipped workers ($2.13 base rate plus tips), some student workers (85% of minimum), and designated exempt professionals. While 30 states and numerous localities mandate higher rates, the federal minimum remains the floor in 20 states. When adjusted for inflation (CPI), the current rate's purchasing power has declined approximately 27% since its last increase, reaching its lowest real value since 1956. Economic research shows varying impacts on employment (elasticity estimates -0.1 to -0.3), poverty rates, wage inequality, and business operations. The debate over raising the rate involves complex considerations of living standards, business costs, employment levels, and regional economic variations.