Minimum Wage Increase Takes Effect

The first of three minimum wage increases went into effect on July 24 when the minimum wage rose to $5.85 an hour. The second increase, to $6.55, will take place on July 24, 2008 and the final increase, to $7.25 an hour, will take place on July 24, 2009. The increases are the result of legislation that the Democratic-controlled Congress approved in January 2007.

Nearly 13 million workers, or 10 percent of the U.S. workforce, will directly or indirectly benefit from a raise in the minimum wage to $7.25 per hour. A rally, attended by over 100 members of Congress and hundreds of cheering trade unionists, was held on Capitol Hill to hail the first increase in 10 years. At that rally, Sen. Edward Kennedy and Rep. George Miller (D-CA) announced that they plan to introduce legislation to increase the wage further. At the new rate of $5.85, the real value of the minimum wage – its purchasing power – is still $2.25 below what it was at the peak of its buying power in 1968.

The minimum wage would have to be $9.50 an hour today to have the purchasing power that it had in 1968.

07-27