NFIB

New federal rate of $6.55 per hour effective Thursday

In the midst of dealing with the weak economy, a healthcare crisis and rising energy costs, small business owners will be hit in the pocketbook again this week when the federal minimum wage increases Thursday to $6.55 per hour.

Under the Fair Labor Standards Act, amended in May of 2007, the federal minimum wage will increase from $5.85 per hour to $6.55 per hour Thursday, July 24. It will increase again to $7.25 per hour July 24, 2009. Many states also have their own minimum-wage requirements, and employers are required to pay workers at whichever rate is higher.

NFIB has traditionally opposed minimum-wage hikes because they are harmful to small business owners already struggling with increasing costs such as those associated with healthcare, energy and transportation. While small business strives to pay workers a fair wage, many small firms have difficulty coping with continually rising wage mandates, and often find themselves discouraged from hiring new employees or expanding their businesses. 

"With inflation pressures increasing for small business owners, this is not the best time to be forcing employers to pay workers higher wages," said NFIB Chief Economist William Dunkelberg. "Every dollar a minimum wage worker gains must come out of either the income of the business owner (so they have less to spend on their business) or out of the pockets of customers who will have to pay higher prices (e.g. inflation) and will have less money to spend on other goods and services."

Download the federal minimum-wage requirement poster from NFIB's poster resource or the Department of Labor.