The minimum wage in the United States increases tomorrow, from $6.55 per hour to $7.25 per hour. This increase results from legislation by the U.S. Congress, and is the third and final bump in the minimum wage mandated by the Fair Minimum Wage Act of 2007.
We’ve been hearing a lot of discourse about the minimum wage lately, and how its increase might affect our struggling economy. If you are paid the minimum wage, or close to it, you could see a pay raise tomorrow. If you are paid the minimum wage, chances are that the 70 cent increase in pay per hour will be noticeable in your paycheck and will be welcomed by you. If you are an employer paying minimum wage, you might be grumbling about being forced to give your employees more money, whether you feel they deserve the increase or not.
I earned the minimum wage when I was 17 years old. I worked at a frozen food distributing company, washing trucks, running errands, and earning money when I would have been better off studying. On February 1, 1967, the minimum wage increased from $1.25 per hour to $1.40 per hour. My job was covered by the law governing the minimum wage, so I saw an increase in my paycheck. But before I saw the increase, my boss, William “Sparky” Sparks, called me and two of my co-workers into his office and told us we would be receiving a pay raise. He congratulated us, then told us that he expected to see a proportionate increase in our enthusiasm and productivity.
I was young and had little experience in dealing with employers and supervisors, but it seemed to me at the time that Sparky’s reasoning was a bit flawed. I had received no information from the people responsible for my pay raise (the Federal Government) about their expectations upon lavishing a 15 cent per hour windfall upon me. No one had warned me that I would have to work harder now that I earned 12 percent more. That was actually a pretty substantial increase in pay, come to think of it. I guess I really should have considered working harder and being more productive. I might have washed a few more truck windows that day, or swept out an extra semi trailer or two. I just don’t remember. But I’m sure that after a few days I probably got used to making more money and eventually fell back into my former rate of production.
Considering that my previous job (cooking french fries at McDonalds) paid 96 cents per hour, my pay increased a total of 44 cents per hour, or a whopping 46 percent, in just a few months. This boggles my mind. How could I have survived on 96 cents per hour? Well, I lived with my parents. Gas probably sold for 35 cents per gallon, and my father provided my medical insurance. I was extremely fortunate and didn’t even realize it.
In case you’re wondering, McDonalds was able to pay me 96 cents per hour because, at that time, workers there were not covered under the minimum wage law. I believe the jobs were excluded because they supposedly did not involve interstate commerce, therefore the employers could pay any wage the labor market would bear.
The pay raise that employees will see tomorrow amounts to just over 10 percent. This pales in comparison to my good fortune in 1967, at least percentage-wise. I guess I really had it pretty good back then. Our government was much more generous. Somehow, employers were able to cope with the impact of such substantial increases in labor costs. I imagine we’ll make it through this pay raise also, one way or another. And 40 or 50 years from now, people will chuckle about the minimum wage and cost of gasoline in 2009.