The Federal Minimum Wage increases $0.70 per hour on Tuesday – from $5.15 to $5.85.
Here are some facts about the current Federal Minimum Wage:
- The minimum wage will increase 70-cent on July 24 for each of the next two years, capping in 2009 at $7.25 an hour. That equates to just above $15,000 annually before taxes for a 52-week work year.
- Earning the new Federal Minimum Wage of $5.85 an hour equates to an income of $12,168 a year before taxes. This is just above the federal poverty level for singles which is $10,210. The level for couples is $13,690, and a family of three is $17,170.
- At least 25 states and the District of Columbia have minimum wages higher than the federal rate. Individual cities can also set their own minimum wage. The highest state is Washington at $7.93, the highest city is Santa Fe, New Mexico at $9.50. Here is a list of U.S. state minimum wages.
Why raising the minimum wage is a good thing: The last time the minimum wage was raised was over a decade ago and this raise is long overdue. Many minimum wage workers are currently living near or below the poverty level, and many work multiple jobs to make ends meet. After taxes there is not much left to pay for essentials such as food, shelter, clothing, etc. When you add the fact that a gallon of gasoline costs over half of what a minimum wage earner takes home per hour, you get a good idea that $5.15 per hour is not very much money.
Why raising the minimum wage is controversial: The controversy that surrounds raising the minimum wage comes from the argument that raising the minimum wage will lead to rising costs for food and consumer goods and eliminate jobs. Well, in my opinion, the costs of food and consumer goods have been rising steadily for some time now… it’s called inflation! I don’t think this raise in the minimum wage will have a big effect on the number of jobs either. Businesses will always find a way to make things work. What this hopefully leads to is increased efficiency from a business and management perspective.
I support raising the federal minimum wage. Granted, $0.70 is not a huge increase, but to those who earn minimum wage, it makes a big difference. People deserve to earn a decent wage, and I think this series of raises is a good step in the right direction.