U.S. minimum wage sees first increase in 10 years to $5.85

Social justice news
July 2007

U.S. minimum wage sees first increase in 10 years to $5.85
A new federal minimum wage goes into effect today the first such increase in 10 years. This new wage provides an income boost for 12.5 million U.S. workers. Under the legislation, the first step of the minimum wage increase—from $5.15 to $5.85—goes into effect on July 24, 60 days after the president signed the wage hike into law. The minimum wage continues to rise annually for two years, reaching $7.25 in 2009.

The last wage hike was a two-step increase in 1996 and 1997.

Already, 32 states and the District of Columbia have minimum wages higher than the federal, so only 20 states will be affected by the first wage increase today. 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.

In cases where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher of the two minimum wages.

Government figures show about 1.7 million people earned $5.15 or less per hour in 2006. A person working 40 hours a week at the current minimum wage of $5.15 makes about $10,700 a year. A raise to $5.85 an hour would increase that to $12,168 a year before taxes. An increase to $7.25 would raise that to just over $15,000 a year.

The increase had long been sought as a poverty-fighting and family-support measure by both the U.S. Conference of Catholic Bishops and Catholic Charities USA.

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