Federal Minimum Wage To Increase By 70 Cents The federal minimum wage will rise this week, from $5.85 to $6.55 an hour. But Ross Eisenbrey of the Economic Policy Institute says even with the latest boost, minimum wage workers won't make up the ground they have lost to inflation.
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Federal Minimum Wage To Increase By 70 Cents

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Federal Minimum Wage To Increase By 70 Cents

Federal Minimum Wage To Increase By 70 Cents

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STEVE INSKEEP, host:

Starting this week, more than 1 million low-wage workers get a pay raise. The federal government's minimum wage is set to jump 70 cents, to $6.55 per hour. NPR's Scott Horsley reports.

SCOT HORSLEY: This is the second of three annual increases in the minimum wage that were ordered by Congress last year, after a decade with no increase. Ross Eisenbray of the Economic Policy Institute says even with the latest boost this week, minimum-wage workers won't make up the ground they've lost to inflation.

Mr. ROSS EISENBRAY (Economic Policy Institute): The minimum wage has been losing its value pretty steadily. You know, it's been falling, falling, falling, then it bumps up a little, falls, falls, falls, bumps up a little, but has a long way to go to catch up to where it was all throughout the '60s and '70s.

HORSLEY: In fact, nearly half the states already require a higher minimum wage than the federal government does. But the federal minimum still governs pay for many workers, especially in low-wage industries like restaurants and hotels. Eisenbray says when the federal minimum jumps to $7.25 an hour next year, some 12 million workers will be affected.

Mr. EISENBRAY: Six and a half million, I think, will get a direct bump. And then people who are just above $7.25, because their managers and bosses will want to keep some distance between them and entry-level workers, will give them a raise, too. It's still a very real thing for millions of people.

HORSLEY: Raising the minimum is still controversial, since opponents argue it forces employers to cut staffing. Ten states have taken steps to index their minimum, so wages rise automatically with inflation.

Scott Horsley, NPR News.

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