Finance Globe

U.S. financial and economic topics from several finance writers.
1 minute reading time (246 words)

Minimum Wage Increase

The new federal minimum wage of $6.55 an hour goes into effect today, which amounts to a $.70 pay raise for the roughly two million American workers who must make ends meet on minimum wage.

This increase is the second in a three-year plan to increase the federal minimum wage; minimum wage workers can expect another $.70 wage increase next summer, to bring to federal minimum wage to $7.25 an hour. If the state and federal minimum wage are different, employers pay their workers the higher minimum wage to be in compliance with both federal and state law.

About half of all states already have a minimum wage set above the federal minimum, so many workers won't be affected by the federal increase. State law is not tied to federal law for many employers in Wisconsin, Wyoming, and Arkansas, so those employers will not have to abide by the new federal minimum wage.

The wage increase brings some much-needed relief for entry-level workers in these difficult times of increased fuel and food costs and high inflation. Many workers say that it's better than nothing, still not enough to live on.

Those most likely to suffer from the federal minimum wage increase are small business owners who employ entry-level workers. Consumer spending has decreased in the slowing economy. Increased labor costs during an economic downturn will be an especially challenging period for a smaller company whose business is already suffering.

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Wednesday, 08 February 2023

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