The Third Minimum Increase In Wage Is Both A Money-maker And Money-taker
This is the third minimum wage increase in three years and has become effective from Friday 24th July 2009
. Workers numbering million will soon get increased salary cheques while the many that are weighed down by loss of business will have to face the increase in costs.
The wage increase will affect nearly 3 million to 5 million Americans. The wage increase will be to $7.25 per hour from the present rate of $6.55 per hour said Hilda Solis the Secretary of Labour.
All the workers in 30 states as well as all the industries covered by Fair Labor Standards Act of the federal government will be eligible for this new wage rate. Those who are working in the District of Columbia are currently enjoying a rate that is $1 more than elsewhere. Their rates will now go up to $8.25. Solis explained, "The extra disposable income comes to about $120 a month."
The expectation is now the workers with more cash will be spending more in their localities. Business entrepreneurs like Robert Mayfield who is the owner of five restaurants (Dairy Queen) is critical and does not think that any extra spending will come from the extra salary paid. He rues that now he will have to increase his own rates to over $8 an hour to win competition with rival employers who are now giving $7.25. He explained, "We were already paying a good bit more than the minimum, but that's what it took to get good people. You have to stay competitive."
The owner of Olympia Candies Bob McGrath said he had sliced salaries and working hours of some the employees of his sweet shops to meet the challenge of the recession. Thus making it compulsory to make more payments simply does not make any sense. He said, "Here we're having (employees) take pay cuts, but we're hiking minimum wage. Something is wrong."
The final increase enforced on Friday is founded on a law of 2007. On 24th July 2007 the rates spiked to hourly $5.85. In 2008 it went up to $6.55. Solis opines that these bumps have been coming for a long time. The last minimum wage bump was in 1997.
Solis does not think that this will have a sizeable impact on businesses. She said that many business houses had been prepared for it from before.
by: Kevin Simpson
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