On Friday, July 24, the national minimum wage increased by 70 cents – from $6.55 per hour to $7.25 per hour – the final of three increases to take effect under legislation enacted by the Democratic Congress in 2007.
U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, said that the increase will help many Americans struggling to cope with the economic downturn. Miller was the lead sponsor of the bill in the U.S. House of Representatives and Sen. Edward Kennedy (D-MA) was the chief sponsor of the measure in the U.S. Senate.
Almost four and a half million workers in 31 states will now see a bigger paycheck, according to the Economic Policy Institute. They estimate that an additional 1.6 million workers earning slightly above the minimum will be indirectly affected because of businesses preserving their wage structures. But even with this latest increase, workers making minimum wage today are earning about 18% less than in 1968, after adjusting for inflation. An individual earning $7.25 an hour in a standard 2,000-hour work year would earn $14,500 per year, which is still slightly below the 2009 federal poverty level of $14,570 for a family of two.
Not all states will be affected by the recent increase because they may already have a state minimum wage that is higher than the federal rate. When state and federal regulations differ, the higher of the two rates applies. Nineteen states and the District of Columbia will not be affected by this increase. Of these, there are six states that already have a minimum of $7.25: Arizona, Hawaii, Iowa, Kentucky, Maine, and New Hampshire. The other 13 states and the District of Columbia have a minimum wage above $7.25: California, Colorado, Connecticut, District of Columbia, Illinois, Massachusetts, Michigan, Nevada, New Mexico, Ohio, Oregon, Rhode Island, Vermont, and Washington.
31 states are affected by the higher federal minimum wage: Alabama, Alaska, Arkansas, Delaware, Florida, Georgia, Idaho, Indiana, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, West Virginia, Wisconsin and Wyoming.
Source: Bureau of Labor Statistics
Posted 07/27/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.
