Minimum Wage Rises 70 Cents

Increase To $6.55 Per Hour Marks Second Of Three Annual Increases

(AP)  About 2 million Americans get a raise Thursday as the federal minimum wage rises 70 cents. The bad news: Higher gas and food prices are swallowing it up, and some small businesses will pass the cost of the wage hike to consumers.

The increase, from $5.85 to $6.55 per hour, is the second of three annual increases required by a 2007 law. Next year's boost will bring the federal minimum to $7.25 an hour.

Workers like Walter Jasper, who earns minimum wage at a car wash in Nashville, Tenn., are happy to take the raise, but will still struggle with the higher gas and food prices hammering Americans.

"It will help out a little," said Jasper, who with his fiancée support a family of seven, and who earns the minimum plus commissions when customers order premium car-wash services.

The bus fare he pays each day to get to work already went up to $4.80 this spring from $4. "I'd like to be on a job where I can at least get a car," he said.

Last week, the Labor Department reported the fastest inflation since 1991 - 5 percent for June compared with a year earlier. Energy costs soared nearly 25 percent. The price of food rose more than 5 percent.

So the minimum wage hike is "a drop in the bucket compared to the increases in costs, declining labor market, and declining household wealth that consumers have experienced in the past year," Lehman Brothers economist Zach Pandl said.

The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.

Twenty-three states and the District of Columbia have laws making the minimum wage higher than the new federal requirement, a group covering 60 percent of U.S. workers, according to the Economic Policy Institute, a think tank.

"You get desperate, because you can't really pay for everything," said Gladys Lopez, 51, a garment worker from Adjuntas, Puerto Rico, who makes military uniforms and has earned the federal minimum for 18 years.

She says she would need to make at least $50 more a week to pay all her bills and take care of her 84-year-old mother, whom she supports.

When the minimum rises again next year, catching up with more states, more than 5 million workers will get a raise, said Lisa Lynch, dean of the Heller School for Social Policy and Management at Brandeis University.

Some small businesses are already making plans to raise prices to offset the higher wages they have to pay their workers.

David Heath, owner of Tiki Tan in College Station, Texas, said the increase will force him to raise prices for his monthly tanning services by about 12 percent. Tiki Tan had been paying its employees $6 per hour.

"There just isn't any room for profit, and so this is why prices will have to go up," he said, citing the wage increase and higher fuel costs. "I have to recoup those costs."

The increase in the minimum wage could push food prices even higher by rising the pay for agricultural workers, said Brian Bethune, chief U.S. economist at consulting firm Global Insight.

But he said he did not expect the change to have a major impact on the economy because recent increases in productivity, which enables companies to produce more with fewer workers, are keeping labor costs in check.

That makes it unlikely the minimum wage increase will trigger a "wage-price spiral," in which workers facing higher costs demand more pay, which in turn causes companies to raise prices higher, sending inflation coursing through the economy.

And most businesses, even restaurants and other service sector companies, already pay above the minimum wage anyway. Dan Whitaker, general manager at Anis Bistro in Atlanta, a casual French restaurant, said employees earn at least $8 an hour.

"You can't get a dishwasher for minimum wage," he said.

[babooph]

A rat could not live on that in the States.Minimum wage was over 1$ in the 1960s-adjust that for inflation-about 15$ today!!Top tax rate for the rich-90%-down to 37%-plus only 15% on profits& exempt from most soc. sec. tax!!!The middle class deserves the shaft it has allowed-let them grab their ankles & enjoy it

[toldyouso12]

"Breeding" and "rabbits" is a bit harsh, don''''t you think? And "choosing" to breed? We''''re talking about moral agency here, and none of us is in a position to comment on it. Minimum wage increases are a symptom of a larger problem, nothing more. But is it not the noblest of things a country can do than to provide for the wellbeing of all of its citizens? Not just the well-to-do portion? When we cease to do so, I feel we will have reached a cliff.

Posted by newview08 at 03:49 PM : Jul 24, 2008

Well said--it is said that a prosperous nation is only as successful as the least of its citizens--in that case, everyone in America who helps no one except themselves -- all need to wear a big "L " no matter how much money you have--because you are a loser--you just don''t realize it yet, because your humanity parameters are all skewed.

[toldyouso12]

I am referring to the other part of the 2 million that are adults. Such as the man in the article. He can''''t be to start he is shacked up with a girlfriend that has seven kids. Those are the losers!! Having kids is not a right nor an expense I should pay for through tax dollars. Then he goes on to say he wants a better job just so he can increase his expenses by owning a car. What a rocket scientist. Maybe we should give him a medal for being a citizen along with his new raise! Thanks for your service as a vet!

Posted by nathan8804 at 03:12 PM : Jul 24, 2008


Your major was history--yet your reading comprehension SUCKS. The man is living with a girlfriend and has a family of seven. In stating a "family of seven" that usually includes the man and his fiance, so they have 5 other dependents--at no point does the article state they are children. He and his fiance might be taking care of dependent parents on both sides and have 1 child, or they may have foster children or they may have taken in another relative. You don''t know--yet there you are yammering and judging away. But here is a bit of truth--say what you will, but most of those who criticize could not walk even one week in many of the shoes of these poor people and if you had endured what they had--chances are your judgmental self entitled azzes could never have survived their lives to even make minimum wage.

[toldyouso12]

Either we can be part of the problem or part of a solution. I make a point of getting to know people who I see working hard in dead in jobs. Often, I will offer them the chance to go to vocational school to take up something such as CNA or dental hygienist, etc A CNS position costs about 700.00 and can be done in a few months. Some take me up on it, some do not--I even offer to help coach them in their studies if needed. 700.00 may not seem like much money--but when people are struggling and doing all they can just to survive--it can be more than they can achieve. If you can''t put your money where your mouth is--=then remember the dynamics of these people as America continues to lose economic and professional ground and downsizes--perhaps, If there is kismet, those who judge the poor so harshly can have a first hand chance to see how one gets there and how, despite best efforts--it can be very difficult to get back from below zero.

[toldyouso12]

Posted by mjvw2 at 01:26 PM : Jul 24, 2008

Actually, there are a number of situations that can keep a person at the bottom of the economic ladder. It can start with being raised in an abusive or disadvantaged environment where higher education is frowned on and discouraged--or worse still, it can include the circumstance where a person is working 2 jobs just to live hand to mouth and never has the time or money to go to vocational school or college.

Many of you who have forget or negate how you got what you have even if it is a little--not everyone can get a grant. Not everyone can afford to not work and go to school. Not everyone has family to help out or a support system to share the load--but perhaps even sadder than the situations many Americans are in that deprive them of choices and therefore opportunities--is the obvious deprivation and bankruptcy of the soul which makes others judge, condemn and analyze what they don''t really know much about. And save the story of how you made it or anyone else you know--YOUR story and success is NOT the story and success of another. Every situation is different and made up of a million choices, circumstances, luck, opportunity and assistance--if you got ahead--you are blessed, but the sequence of events or luck is and will never be the same for everyone--

[toldyouso12]

Posted by mjvw2 at 01:26 PM : Jul 24, 2008

Actually, there are a number of situations that can keep a person at the bottom of the economic ladder. It can start with being raised in an abusive or disadvantaged environment where higher education is frowned on and discouraged--or worse still, it can include the circumstance where a person is working 2 jobs just to live hand to mouth and never has the time or money to go to vocational school or college.

Many of you who have forget or negate how you got what you have even if it is a little--not everyone can get a grant. Not everyone can afford to not work and go to school. Not everyone has family to help out or a support system to share the load--but perhaps even sadder than the situations many Americans are in that deprive them of choices and therefore opportunities--is the obvious deprivation and bankruptcy of the soul which makes others judge, condemn and analyze what they don''t really know much about. And save the story of how you made it or anyone else you know--YOUR story and success is NOT the story and success of another. Every situation is different and made up of a million choices, circumstances, luck, opportunity and assistance--if you got ahead--you are blessed, but the sequence of events or luck is and will never be the same for everyone--

[lightningfro]

I''ve known several people with college degrees working dead end jobs that barely paid more than 9 bucks an hour (one girl had 2 degrees and was about to start on her 3rd degree). The days of being guaranteed a good paying job if you''re a college graduate are LONG GONE people (unless you go into the nursing field). And I''ve seen many job listings that want people with some college or degrees yet they only pay $8 an hour, so again who is actually naive enough to believe college degree = $$$$$$??

[paganmama]

There have been quite a few folks on this board who have taken the position that the reason people can only earn minimum wage is because they didn''t go to college. I call B-U-L-L not everyone is college material and as such, continuing to spout "THE-ONLY-WAY-YOU''LL-MAKE-A-DECENT-LIVING-IS-BY-GOING-TO-COLLEGE" is very elitest. I think we need to point those folks that aren''t University material vocational programs and trade school. We all need remember there is nothing work with working at a skilled trade. We should show respect for folks who work in these type of jobs. There will always be the need for Plumbers, Carpenters, Electrician, Mechanic, HVAC Techs etc., and these are careers that can provide an indiviual with a decent livable wage.

[dronemonk]

It used to be that profits were the unpaid wages of workers. Now, they''re often the difference between what the worker is paid, and what they draw in Food Stamps to feed their families. Raise the minimum wage to 10 bucks an hour, or it means nothing.

[randynason]

WOW! Now I can get that brain surgery and quit eating cat food. -heh-

[spadeisspade]

I hate to say it, but every time the min. wage increases, I think that my pay is that much less that I am worth. Minimum wage is often a low skill based pay, so people that make just a few dollars over it feel like it makes them that 70 cents closer to "no skill" than before. If min. wage goes up, everyone''s hourly wage should go up.

[oneworldusa]

Posted by ITSmyTYME200 at 06:15 PM : Jul 24, 2008

-Unfortunately, in today''s economy there are people who are jobless by no fault of their own who might be happy to make $6.55. They are taking jobs from the teens who''d like to make a few bucks to put gas in the car, go to a high school football game, and take their girlfriends out for ice cream.

It''s not so much about what $6.55 does in today''s economy as much as the min wage increase was LOOONG overdue as Congress increased it''s own exorbitant wages for very few hours of work in the middle of night will continuing to supress the working class.

The fact that it''s taking place now in a poor economy is merely concidence and the min-wage people CERTAINLY wouldn''t have wanted to plan this with fuel prices up 200% over the last 4 years and food and energy costs up 10-20%. For them, its too little to late, I''m afraid.

[oneworldusa]

Posted by ontheleft at 05:04 PM : Jul 24, 2008

-LOL, and OHHHH so correct. The travesty of it all!
Unfortunately, their ploy or plan is to pass the costs onto us, the consumers, because GOD FORBID they take a dime reduction in pay to help out their own employees or companies (for the most part, some have, and some do, but not most) Perhaps some day they''ll have to make a choice. County Club or 3-month European vacation.....WAaaaaaahh..

[itsmytyme200]

I believe that the Raise will help to a point! I am a manager at my work place. However, the fact that it is up to 6.55 is that if u have no experiance no one is going to want to hire you. I believe that it with the rise of the economy that it is not going to change much with prices on everything going up its not like you are really going to get a raise. Now you tell me where this is going to help out the economy?

[oneworldusa]

The illegals got a raise? This won''t nearly cover the increase in cost of fuel to get back and forth to work. Good. Less money to send to Mexico. If times get too tough here, maybe they will go back on their own.

-Please, no offense intended to the legal, hard-working teens and such who make min wage to help pay for school and things. Glad you got a raise. I made $3.85 at my first job at the age of 15 and was happy to be earning it. I paid for all my college on my own.

[payasyougo]

Definition of minimum wage - a monetary penalty paid by society because of that society''s failure to have an effective K-12 educational system.

[dinkydog1]

This minimum wage increase is an outrage. The burden of paying a higher minimum wage falls disproportionately on the backs of the wealthy.

How can the rich afford necessities such as caviar when they have to pay higher wages to the hired help?


Posted by ontheleft at 05:04 PM : Jul 24, 2008

..........................

Yes brother, bless the rich, forced to give so generously to all the riff-raff. They are already burdened with child labor laws, overtime and those pesky unions. How will they survive? Is this not communism?

[ontheleft]

This minimum wage increase is an outrage. The burden of paying a higher minimum wage falls disproportionately on the backs of the wealthy.

How can the rich afford necessities such as caviar when they have to pay higher wages to the hired help?

[sistatee-2009]

This is great news! The people making minimum wage can now go out and purchase foreclosed property!

[dinkydog1]

dinkydog-
Additionally his research research has been supported by the National Science Foundation, the National Institute of Aging, the National Cancer Institute, the National Institute for Child and Human Development, the U.S. Departments of Labor and Education, the U.S. Office of Technology Assessment, the U.S. Social Security Administration, and the Russell Sage Foundation. Nice try.


Posted by hk94 at 04:03 PM : Jul 24, 200

............

Who is this "he" you refer to and when did the national cancer institute and the other orginizations you mention start vetting economic studies. I think you scooped this one right off the barn floor. You switched studies on me but thats ok, the German study you cite is not a study at all but an opinion survey base on selected participants.

Give it up, this stuff is bunk.