If you pay your employees minimum wage, prepare to give them a raise effective today: the federal minimum wage increases to $7.25 per hour, effective July 24. Of course, you may live in a state that has a higher minimum wage; in that case, employers are obligated to pay the higher of the two wages. Click here for a state-by-state list of minimum wage rates.
What’s that you say? This won’t affect your business since you pay higher than the minimum wage? Don’t be so sure. According to this article from the New York Times, increases in the minimum wage tend to have a ripple effect, as employees with wage rates above the minimum wage want to maintain their lead over their lower-earning counterparts.
Think the increase in the minimum wage is too much? You’re not alone. As this article from the Associated Press points out, some business are concerned that the increase in the minimum wage will slow down the economic recovery. On the other hand, the Times points out that even with this increase, the minimum wage is still no higher now, after inflation, than it was in the early 1980s, and it is 17 percent lower than its peak in 1968.