Gifts & Decorative Accessories: Higher Minimum Wage Takes Effect

By Staff
Gifts & Decorative Accessories, 7/24/07

Washington, DC — For the first time in 10 years, the minimum wage increased on July 24 to $5.58 an hour from $5.15. Another increase, to $6.55, will follow on July 24, 2008 and yet another on July 24, 2009 to $7.25.

The increase marks the end of the longest period without a raise since the minimum wage was enacted in 1938.

Despite these raises, minimum wage workers will have less buying power than those workers 50 years ago, and more than 70 percent of workers live in states where state minimum wages already trump the new federal wage increase, according to the Economic Policy Institute.

Increases can be hard on small businesses. “In the small-business sector where companies have restricted cash flow, any time you have to arbitrarily increase labor costs, they have to cover the costs in some ways," Marc Freedman, director of labor law policy at the U.S. Chamber of Commerce, told USA Today, "They have to pay more and get nothing out of it."

Nonetheless, two out of three small business owners supported an increase in the minimum wage in a nationwide survey conducted by Small Business Majority in 2006.

Retailers are required to display a poster stating the new law in a prominent place. Among other sources, these are available from the National Retail Federation.