The Federal Minimum Wage Increases This Week - Are You Getting a Pay Raise?
On July 24th, 2008, the Federal minimum wage in The United States will increase from $5.85 per hour to $6.55 per hour in accordance to the 2007 amendment to the Fair Labor Standards Act. This is a 70 cent or approximately 12% increase from last year. Are You getting a pay raise?
I am guessing that for most people the answer is "no" because many businesses already pay more than the Federal Minimum Wage to compete for workers. Additionally, more than 20 states have their own minimum wage laws that give workers higher minimum wages than the Federal rate. For example, in California the minimum wage is already $8.00 per hour this year .
Some have argued that a raise in minimum wage would hurt small businesses, but according to a survey conducted last year , only 3 percent of the small businesses they surveyed paid their workers only the Federal minimum wage, and 6 percent paid only the state minimum wage. The remaining 91%, of small businesses already pay their workers more than the minimum wage so there is not much for them to worry about.
Next year the Federal minimum wage will rise again to $7.25 and stop there until there is more legislation. Some states already index their minimum wage increases to inflation and adjust it annually so the next increase also may not have too much of an impact on businesses that already pay above the minimum wage.
As always, you should know your rights as a worker no matter where you work. If you earn close to the minimum wage, then you should check your state's labor laws for the most updated minimum wage rates. If the law says that you are supposed to receive an increase in pay then you should make sure that you are paid the right amount on the effective date. If applicable, your workplace should also display a new poster informing you of the new minimum wage rates.
Are you getting a pay raise due to this law? Will it help you significantly in this economically challenging year?
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