Federal Minimum Wage Goes to $6.55

June 18th, 2008 Posted by Amelia

On July 24 2008, the federal minimum wage will increase by 70 cents from $5.85 per hour to $6.55 per hour. The federal wage affects every employer with annual revenue over $500,000 per year, and those who engage in interstate commerce.

 

Currently, 32 states have state minimum wages higher than the federal minimum wage. In those states, employees are entitled to the higher state rate.

 

On May 24, 2007 President Bush signed the Fair Minimum Wage Act of 2007 into law. That  bill increased the federal minimum wage from $5.15 per hour in 2007 to $7.25 per hour in 2009. The increase takes place in three 70-cent increments, with the first increase 60 days after the bill was signed into law. The remaining increases take place one year and two years to the day after the first. So the federal minimum wage increased from $5.15 per hour to $5.85 per hour on July 24, 2007. In 2008, the federal minimum wage will increase to $6.55. The final increase under this law will occur on July 24, 2009 when the federal minimum wage goes to $7.25 per hour. Each of those changes will be reflected in a corresponding change to the North Dakota minimum wage.

 

The federal minimum wage increase passed in 2007 was the first in more than a decade. During that time, members of congress had voted themselves raises averaging more than $35,000. In 2007, the minimum wage of $5.15 per hour had less purchasing power than the $1.60 minimum wage in the 1960’s. The increase to the federal minimum wage was a campaign issue in the mid-term elections of 2006, with the new Democratic majority in congress vowing to increase it within the first 100 days in office. Prior to that increase, more than 30 US states had passed legislation to increase the state minimum wage above the federal rate.

 

A number of states, like Idaho, have laws that tie the state minimum wage to the federal minimum wage. These include Utah, Texas, North Carolina and North Dakota. Other states, such as Maryland, have a state minimum wage. However, there is a provision in the statute that the state minimum wage will increase to equal the federal rate, if the federal rate is higher. Currently, the federal minimum wage is $5.85 per hour, while Maryland’s minimum wage is $6.15 per hour. On July 24, 2008 when the federal wage goes to $6.55 per hour, the Maryland minimum wage will increase to $6.55 as well.

 

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  1. Posted by: Child Support: Increase in Federal Minimum Wage Goes to $6.55 : RosenInfo.com

    [...] Increase in Federal Minimum Wage Goes to $6.55: “Thanks to Labor Law Center Blog’s Federal Minimum Wage Goes to $6.55 because I forgot there would be an increase this year. ‘On July 24 2008, the federal [...]

  2. Posted by: Amelia

    Hi Roseninfo.com! It’s always great to hear from you. It’s our pleasure to keep readers updated on all the latest HR news. Thanks for reading the blog! — Amelia

  3. Posted by: angelique

    I am a bookkeeper for small business and I think this increase in the minimum wage is a bad idea at this time. We will most likely have a lot of small businesses close because of it. I believe the increase in the cost of living does not warrant another increase in the minimum wage.

  4. Posted by: Amelia

    Hi Angelique! Many small business owners would agree with you. Unfortunately, the 2008 and 2009 minimum wage increases were passed in early 2007, when the economy was booming. We’d love to hear from others who agree or disagree with Angelique. And, thanks for reading! Amelia

  5. Posted by: Rhonda Grimsley

    I am all for increased minimum wage. The cost of lliving has increased, gas, groceries, etc. but for many the paychecks remain the same. People need more money, or should I say that I need more money!!

  6. Posted by: Amelia

    Hi Rhonda– You make some excellent points! Unfortunately, for most people the increase in the minimum wage won’t result in a bigger paycheck. Employers are not obligated to increase the wage of anyone currently earning more than $6.55 per hour — and most will not. Even minimum wage employees in 32 states will not be affected, since they are already being paid a higher rate. For most people, increasing skills through training is still the best route to earning more. Do you agree or disagree with Rhonda and Angelique? We’d love to hear from you! Thanks for reading the blog! Amelia

  7. Posted by: Jayne

    Unfortunately, what Amelia stated about the economy “booming” in 2007 is not true. If you remember last year was when the weak economy began really showing. I own several small businesses and in our area the weak economy began in 2006. Therefore, after the increase in minimum wage we had to go up in our prices like the price of gasoline to help our businesses survive.

  8. Posted by: Amelia

    Hi Jayne! Thanks for the correction! You’re absolutely right!! The economy was strong in Feb. 2007 in many parts of the country, when the minimum wage increase was passed by Congress. But it was already starting to slow down in other parts. Thanks for reading the blogs! ~ Amelia

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