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ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MELISSA BLOCK, host:

And I'm Melissa Block.

Cashiers, housekeepers, office clerks, pizza delivery drivers - we're talking about minimum-wage workers, and tomorrow their wages go up. That's when the second phase of a three-step increase goes into effect. The new rate is $6.55 an hour.

Here's NPR's Cheryl Corley on what that means for workers.

CHERYL CORLEY: About a quarter of the people who work for minimum wage are teenagers, but most are adults, like 63-year-old Shirley Golliday.

Ms. SHIRLEY GOLLIDAY (Minimum Wage Worker): This is the office where I work. When I first come in in the morning…

CORLEY: Golliday is a part-time office clerk, putting in 20 hours a week at the Northwest Indiana Community Action Corporation. She helps pre-screen applications for people trying to get into nursing homes. She got this job through the National Able Network, which helps seniors reenter the workforce. Her pay is the minimum wage - for the past year, $5.85 an hour.

Ms. GOLLIDAY: A few years ago, I worked at a local company in Merrillville, and the guy, the gentleman said that he was going to pay me minimum wage, and I said, no way, I'm not going to work for minimum wage. Well, at that time that would've been all that I had, and I don't think I could have made it on that at that time. But now, because the minimum wage that I make now, it is a good supplement for me.

CORLEY: Like many working seniors, the money is a supplement for Golliday's Social Security check and the financial help she gets from her children. The increase will mean an extra $28 a week for Golliday and other minimum-wage workers. She says that's good news for working seniors.

Ms. GOLLIDAY: Because a lot of seniors spend a lot of money on medication. Everybody wants to live a fulfilled life, and they don't want to be scrapping.

CORLEY: Although the new federal minimum wage is $6.55, thousands of workers make less on the job. Employees who get tips often receive a much lower base pay, with employers making up the difference if the tips don't boost the pay to minimum wage.

The new rate means $262 a week for workers, or $13,624 a year. So during a very informal survey, a few shoppers leaving a grocery store in Maryville, Indiana, stopped to consider whether they could live on that amount.

Ms. HEATHER PENWIT(ph): No.

CORLEY: Couldn't live on that.

Ms. PENWIT: No. That's not enough.

Mr. TOM GROSSMAN(ph): Yeah, well, that'd be hard.

Ms. IRIS PACE(ph): I think you do what you have to do, and I think people make ends meet the best way they can, but I think it's tough.

CORLEY: Heather Penwit, Tom Grossman and Iris Pace all live about 50 miles east of Chicago in the Northwest Indiana towns of Schererville and Hobart. More than half the states in the country have higher hourly pay rates than the federal minimum wage, and the federal rate supersedes any lower base pay set by a state. Indiana is one of about 10 states that ties its minimum wage to the federal formula.

Unidentified Woman: Hi, may I take your order, please?

Unidentified Man: Yeah, give me two Snack Attack double cheeseburgers.

CORLEY: The Indiana Restaurant Association was one of many business groups that argued against raising the minimum wage. John Barney says wages should float with supply and demand. He operates four Wendy's restaurants in Indiana and employs more than 100 people. Most make more than the minimum wage. But Barney says this 12-percent increase will hurt business, even though it comes at a time when it might initially help some low-income workers.

Mr. JOHN BARNEY (Member, Indiana Restaurant Association): The person that would be making the minimum wage, with the price of gas and so forth, they need that money. On the other hand, the people that purchase our products, they also are having the increase in the price of fue,l and it certainly does impact their disposable income. And we are one of the people that suffer from that.

CORLEY: So Barney says businesses have to consider increasing prices or even cutting staff as labor costs rise. Despite the continued controversies over the minimum wage, the $6.55 an hour is now the federal baseline. The 70-cents- per-hour boost still leaves a family of four about $8,000 below the federal poverty level.

Cheryl Corley, NPR News.

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