Americans Worry over Minimum Wage Increase

July 30, 2009

On Friday, the federal minimum wage will increase from $6.55 to $7.25 and while the 70 cents difference may not seem to be dramatic, many Americans are concerned. Though the millions of Americans who earn a minimum wage will no doubt benefit from the increase, many may lose their jobs.

The 10 percent increase is intended to raise the minimum amount that an individual worker can earn up to the current costs of living. However, employers who may already be struggling to keep their doors open in the troubled economy may be forced to let go of some of their employees to make up the difference. This will lead to an even more dramatic unemployment rate, which currently is 9.7 percent nationwide.

However, the raise is generally expected to cause a 1 percent increase in the retail unemployment rate. Some say that this is a small price to pay for generally higher wages. If the minimum increases, then Americans will have more spending money and the ability to pump it back into the struggling economy.