Bush Signs Minimum Wage Increase

President Bush signed a long-awaited minimum wage increase into law May 25, a day after the U.S. House of Representatives voted 348 to 73 to approve the first increase in a decade. The measure was attached to Iraq and Afghanistan war spending bill. The federal minimum wage will rise from $5.15 to $7.25 in three stages over two years; small businesses will enjoy $4.84 billion in tax breaks.

Unhappy with the long stagnation of the wage on the federal level, several states have raised their minimum wages recently. The Economic Policy Institute (EPI) estimates 13 million workers (roughly 10 percent of the U.S. civilian workforce) will receive an increase in their hourly wage rate as the minimum wage rises from $5.15 to $7.25 by 2009, and 5.6 million workers (4 percent of the workforce) who currently earn less than $7.25 will be directly affected by an increase. The additional 7.4 million workers (6 percent of the workforce) earning slightly above the minimum also are likely to benefit from the increase because of "spillover effects."

To view EPI's guide on the minimum wage, visit www.epi.org/issueguides/minwage/epi_minimum_wage_issue_guide.pdf.

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