The Federal minimum wage increased on July 23rd from $6.55 per hour to $7.25 per hour. This wage increase is proscribed by 2007 amendments to the Fair Labor Standards Act. While the increase brings good news to workers making minimum wage, it also creates an added burden on business owners who must now pay higher wages in a struggling economy. Some small business asked Congress to defer the wage increase to some time after the U.S. recovers from the recession.
As a reminder, employers must update their labor law posters to reflect the new wage increase.
Interestingly, even with the increase to $7.25 per hour, a full-time employee making minimum wage only earns about $15,080 per year, hardly enough to live on.
Thirty states, including Georgia, have had to raise their minimum wage as well (states can have a higher minimum wage than the Federal, but not less). Nineteen states already have minimum wages laws that mandate a higher minimum wage than the Federal.
Some economists are predicting that the increase in minimum wage will have a negative effect on the consumer, as many businesses are expected to raise prices to offset increased labor costs.