The Associated Press
WASHINGTON -- The nation's lowest-paid workers will soon find extra money in their pockets as the minimum wage rises 70 cents to $5.85 an hour on Tuesday, the first increase in a decade.
It ends the longest span without a federal minimum wage increase since the pay floor was enacted in 1938. The last previous increase came in September 1997, when President Clinton signed a bill raising the minimum 40 cents to $5.15 an hour.
Legislation signed by President Bush in May increases the wage 70 cents each summer until 2009, when all minimum-wage jobs will pay no less than $7.25 an hour.
In March, the North Dakota Legislature endorsed raising the state minimum wage in lockstep with the federal rate. The state minimum increases to $5.85 an hour on Tuesday; to $6.55 an hour on July 24, 2008; and to $7.25 an hour on July 24, 2009.
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About 6,000 North Dakota wage workers made $5.15 an hour or less in 2006, a federal Bureau of Labor Statistics analysis says. They accounted for 3.2 percent of the state's wage workers that year. Nationally, 2.2 percent of hourly wage workers made $5.15 or less, the analysis said.
In North Dakota, restaurant servers and other employees who normally receive more than $30 monthly in tips have a smaller minimum wage. It increases to $3.92 an hour on Tuesday; to $4.39 an hour on July 24, 2008; and to $4.86 an hour a year afterward.
Lisa Fair McEvers, North Dakota's labor commissioner, said the state Labor Department fielded a number of calls from people curious about the increase when the Legislature approved its minimum wage bill in March, and when President Bush signed the federal measure in May.
"People were calling after the session ended, after the bill was signed by the governor, saying, 'When does it go into effect?'" McEvers said. "We basically had to say, we won't know until the federal government passes their bill."
The increase is one of the few major legislative successes of the new Democratic-controlled Congress. They added the increase to the $120 billion Iraq war spending bill, which Bush initially vetoed because the Democrats insisted on a troop-pullout date. Bush signed the bill May 25 after the Democrats removed their pullout provision.
To help make the minimum wage provision palatable for Republicans, Democrats added $4.84 billion in tax relief for small businesses to help them hire new workers and offset any cost associated with an increase in the minimum wage.
Democratic presidential candidates are making further increases in the minimum wage an issue in their primary campaigns. If the minimum wage were linked to the real purchasing power of a dollar, it would already have reached $9.05 in January 2006, a Congressional Research Service report says.
More than two dozen states and the District of Columbia already have minimum wages higher than the federal level.
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Critics of the federal increase say it might force some businesses to stop hiring entry level employees. They also contend that beneficiaries of a higher minimum wage likely will be teenagers working part-time jobs, not the working poor.
But advocates for the poor argue that making minimum wage won't keep adults out of poverty.
A person working 40 hours per 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 boost that to just over $15,000 a year.
The federal poverty level for singles is $10,210, couples is $13,690 and $17,170 for families of three.
On the Net:
History of increases in the minimum wage: http://www . dol.gov/esa/minwage/chart.htm
Labor Department Q&A on the minimum wage: http:// www.dol.gov/esa/minwage/q-a.htm
List of state minimum wages: http://www.dol . gov/esa/minwage/america.htm
