Minimum Wage Increases 70 Cents

Last year’s Fair Minimum Wage Act was passed which included three scheduled wage increases. Last week the second of the three increases took effect. The current minimum wage is currently at $6.55 an hour. The thrid and final increase of the Wage Act will bring the minimum wage up to $7.25 an hour in July of next year.

At $6.55 per hour, you can translate that into an annual salary of $13,624 based on 2080 hours per year. This is still below poverty level. However with minimum wage increases you tend to see a rise in unemployment as employers try to offset the rise in pay to all their employees by reducing the total employee count.

The Federal minimum wage is a base line and fall back for any states that do not have a minimum wage reqiurement. Many states do have a minimum wage law which is higher than the federal government’s wage. Check out your state here

It will be interesting to see how the current slowing economy will respond to the rise in wages. Paying people more when everything else is costing more may be a tough pill to swallow for companies that are experiencing the cash crunch today. However on the flip side, this increase is needed for everyone trying to deal with the skyrocketing gas and food prices. Hopefully this is a quick correction and we will be back to a rising dollar!

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