Minimum Wage Rises, but so Do Costs

About 2 million Americans get a raise today as the federal minimum wage rises 70 cents. The bad news: Higher gas and food prices are swallowing it up, and some small businesses will pass the cost of the wage hike to consumers. The increase, from $5.85 to $6.55 per hour, is the second of three annual increases required by a 2007 law. Next year’s boost will bring the federal minimum to $7.25 an hour. Last week, the Labor Department reported the fastest inflation since 1991 5 percent for June compared with a year earlier. Energy costs soared nearly 25 percent. The price of food rose more than 5 percent. Twenty-three states, including New Jersey, and the District of Columbia have laws making the minimum wage higher than the new federal requirement, a group covering 60 percent of U.S. workers, says the Economic Policy Institute.

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