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Federal and state minimum wage increases to $7.25 per hour

08.11.09

August 2009 Scranton/Wilkes-Barre/Hazleton edition of The Union News

Federal and state minimum wage increases to $7.25 per hour

BY PAUL TUCKER
THEUNIONNEWSSWB@AOL.COM

REGION, July 20th- On Friday July 24th the federal minimum wage increased to $7.25 per hour.

The United States Department of Labor (DOL) announced with this change, employees who are covered by the federal Fair Labor Standards Act (FLSA) will be entitled to be paid no less than $7.25 per hour.

“This administration is committed to improving the lives of working families across the nation, and the increase in the minimum wage is another step in the right direction. This well-deserved increase will help workers better provide for their families in the face of today’s economic challenges. I am especially pleased that the change will benefit working women, who make up two-thirds of minimum wage earners,” said Secretary of labor Hilda Solis.

The increase is the last of three provided by the enactment of the Fair Minimum Wage Act of 2007, which amended the FLSA to increase the federal minimum wage in three steps: to $5.85 per hour effective July 24th, 2007; to $6.55 per hour effective July 24th, 2008; and on July 24th 2009 to $7.25 per hour.

Under the law, states could force employers to pay more than the federal minimum wage but the states can not pay less.

According to the DOL, the latest change will directly benefit workers in 30 states including: 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, Wisconsin and Wyoming. Those states minimum wage is currently at or below the federal minimum wage or there is no state minimum wage. The new wage will also benefit workers in the District of Columbia, where the minimum wage is required to be $1 more than the federal minimum wage.

According to the DOL, a American family with a full-time minimum wage earner would see their monthly income increase by about $120.00. That is more than a week’s worth of groceries for an average family of four or more than one week’s utility bills. The $120.00 buys three tanks of gas for a small car, Ms. Solis stated.

The DOL added the increase will not only benefit full-time workers. About half of minimum wage workers are part-timers, and they too, are going to see an increase to their incomes.

An employer must pay the higher wage when states rate and the federal rate differ.

In Pennsylvania more than 107,000 workers will likely benefit from the boost in the minimum wage. Approximately 68,000 minimum wage workers will benefit directly from the increase, which for a full-time worker will add $208.00 to their paychecks over the next year.

Another 40,000 workers whose wages fall between $7.25 per hour and $7.35 per hour would likely benefit indirectly from the increase in the minimum wage. While the new minimum wage will not mandate raises for these workers, they are likely to receive them as their employers seek to retain higher quality workers than are currently available at the new minimum wage.

Research shows that increases in the minimum wage lead households with a minimum wage worker to increase their spending and will add $5.5 billion over the next year to the United States economy.

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