July 20, 2009 - Posted by Dayo Adiatu
This Friday, the federal minimum wage will increase from $6.55 an hour to $7.25 an hour. The change is the last of three increases over the past two years as mandated by the Fair Minimum Wage Act of 2007.
The increase comes at a time a time when many Americans need it the most. More than 2.8 million workers will receive a pay increase due to the new minimum wage.
But even with the increase, many of these workers who struggle to support families with their incomes will still fall below the poverty line. An individual earning $7.25 an hour in a 2,000-hour work year would earn an annual income of $14,500, a number still below the 2009 federal poverty level of $18,310 for a family of three.
The raise in the minimum wage is expected to increase consumer spending, which would be an important stimulus to the economy. According to Kai Filion, policy analyst for the Economic Policy Institute, the upcoming increase will generate $5.5 billion in consumer spending over the next 12 months.
Categories: Poverty & Welfare, Workers' Rights
