07.23.09

Federal Minimum Wage Increases Friday to $7.25

WASHINGTON, D.C. – On Friday, July 24, the national minimum wage will increase again 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.

U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, said today 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.
“This pay increase is about helping workers provide for their families. The increase in the minimum wage comes at a very important time for Americans struggling to make ends meet,” said Miller. “Friday’s increase will help millions of Americans who work hard, play by the rules and urgently need a pay raise. Families will have additional income to cover their weekly grocery bills, fill up their cars, and purchase goods and service from local businesses.

“Sadly, there are still some who argue that workers should not get this pay raise. Unlike tax cuts for the wealthy, a higher minimum wage increases consumer spending on local businesses, which is good for everyone. In the wealthiest country in the world, it is an outrage that anyone who works full-time still winds up in poverty. Congress will continue to look at solutions that will help all Americans build a better life for themselves and their families.”

BACKGROUND

  • From 1997 to 2006, the Republican-controlled Congress consistently blocked Democratic efforts to raise the minimum wage. As a result, the purchasing power of the minimum wage reached a 51-year low in 2006. Miller’s legislation, the Fair Minimum Wage Act of 2007, raised the minimum wage from $5.15 per hour to $7.25 per hour in three equal steps. For more information, click here.
  • A recent study by economists at the Federal Reserve Bank of Chicago found that every dollar increase in the minimum wage leads to an $800 increase in spending per quarter by families with minimum wage workers.
  • The Economic Policy Institute estimated that this increased purchasing power will boost consumer spending by more than $5.5 billion over the next 12 months.
  • Workers in 31 states will see an increase in the minimum wage Friday. Those states are: 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.  The remaining states already have state minimum wage rates the same or higher than Friday’s new federal rate.