Washington, DC – Today, the national minimum wage will increase from $6.55 per hour to $7.25 per hour to help millions of Americans who are struggling to make ends meet during this economic crisis. This 70-cent increase is the final of three increases to take effect under legislation passed by House Democrats. In 2007, the newly-elected Democratic Congress passed the Fair Minimum Wage Act to increase the minimum wage from $5.15 per hour to $7.25 per hour and support our workers. 

“American workers are hurting right now, and this increase will make a big difference in paying the electricity bill, buying groceries and filling up your car with gas,” said Rep. Watson. “About 4.5 million Americans will see this raise on their paychecks, resulting in $1.6 billion annually in increased wages.”

Thirty one states are affected by today’s increase. In California, the minimum wage of $8.00 per hour is already higher than the national average and therefore will not see an increase this year.

“Even before the current economic crisis, our economy created a lot of wealth for the wealthy and not much was left for everyone else,” said Rep. Watson. “As we rescue the economy, we must rebuild it stronger than before. This minimum wage increase helps to do that.”

The raise is also crucial to stimulating the local economy through increased consumer spending. The Economic Policy Institute estimated that the increased purchasing power resulting from raising the minimum wage will boost consumer spending by more than $5.5 billion over the next year, and a recent study by economists at the Federal Reserve Bank of Chicago found that every dollar increase in the minimum wage leads to an $800 increase in spending per quarter by families with minimum wage workers. As local businesses struggle to stay competitive during the recession, this increase provides a boost to consumer spending and gives Americans the ability to purchase more products from their local businesses.