Legal news and tips for employees, by Law Office of Eugene Lee

2009 Federal Minimum Wage Increases to $7.25

On July 24, 2009, the federal minimum wage increased from $6.55 an hour to $7.25 an hour. According to NPR’s “Your Gains, Losses in Minimum Wage Hike”, the roughly 5 million wage earners who make less than $7.25 an hour will see an immediate benefit, as likely will another approximately 10.5 million wage earners above them as employers raise their pay scales across the board.

Given the current recession/depression we are in, there is more than the usual level of controversy attending the increase. Conservative economists contend the wage increase will only deepen unemployment as employers respond by cutting jobs. Liberal economists contend the wage increase will put more money into consumers’ pockets, leading to $5.5 billion in additional consumer spending over the next 12 months.

So who’s right?

We may never know. NPR interviewed an economist at UC Berkeley, David Card, who noted that a famous study he conducted (studying the impact of a minimum wage increase on New Jersey’s fast-food industry in the 1990s) showed that the wage increase caused no significant change in the total number of jobs. UC Irvine economist David Neumark, however, says not so for the least-skilled workers such as teenagers. He estimated that the wage increase will lead to the elimination of roughly 300,000 jobs for people in the 16-24 year age group.


Leave a reply

Law Office of Eugene Lee
555 W 5th St, Ste 3100
Los Angeles, CA

Law Office of Eugene Lee
6 Centerpointe Dr, Ste 700
La Palma, CA 90623

T: (213) 992-3299
F: (213) 596-0487

Disclaimer: This website is an advertisement. The information and material contained in this website are for general informational purposes only. They do not constitute legal advice and should not be used or relied on as such. Any liability that might arise from any use or reliance on the contents of this site is expressly disclaimed. Your use of such contents does not create an attorney-client relationship – only an express signed agreement can do that. The content of any communication you send to us via the Internet or through e-mail may not be considered confidential. Eugene D. Lee is licensed to practice law in the States of New York and California only.

Creative Commons License

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. You are free to Share — to copy, distribute, display, and perform the work under the following conditions: 1. Attribution. You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work). 2. Noncommercial. You may not use this work for commercial purposes. 3. No Derivative Works. You may not alter, transform, or build upon this work.