Minimum Wage

What happens to the economy as the minimum wages increase over the next few years. Right now, many states are ahead of the federal rate so not much will be different, but as we get into 2009-2010 things will, indeed, change. Talk about higher taxes, this is another cost to the consumer as businesses raise prices to fit these new, higher rates into their budgets. Watch out.

7/24/07 $5.15 ---> $5.85..........13.5%

7/24/08 $6.55..............................11.9%

7/24/09 $7.24...............................10.5%


Many states are higher than the July 2007 rates and are increased by the rate of inflation, which means that the federal rate will soon overtake almost all of the states and become the minimum rate nationwide. As of now (2007), most states minimum wage is higher than the federal rate of $5.85.

Maryland is at $6.15
Virginia will go with the Federal rate now
D.C is at $7.00 and is set at $1 higher than whatever the Fed rate is

over three years would increase the unemployment rate by less than 0.1% and the
inflation rate by 0.2%.

a 10% increase in the minimum wage causes a
decline of 1-2% in employment among teenagers and a decline of 1.5-2% in
employment for young adults

higher minimum wages led to a
scale-back of fringe benefits and training