Millions of American workers are about to get a federally-mandated raise, which will go into effect on July 24. The raise, which was implemented two years ago before the recession, represents the final wage hike in a three-step boost to the federal minimum wage increase passed by Congress. The minimum wage will rise 70 cents — or about 11% — to $7.25 per hour from $6.55. (Last summer, it went up 70 cents from $5.85.)
Whether Congress would have approved the wage hike had legislators known how dismal the economy would look two years later is an open question. But there’s no doubt the timing is awkward.
The hike will give about 4.5 million workers a raise and boost hourly wages by $1.6 billion a year, according to the Economic Policy Institute.
The final phase of the federal minimum wage hike will impact 31 states whose minimum wage levels are below $7.25, including Florida, Pennsylvania, Nebraska and New York. Firms in these states will have to match the federal minimum. The increase has no bearing on 20 states (including Washington, D.C.), which already mandate an hourly wage of $7.25 or more.