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Federal Minimum Wage to Rise on Tuesday
More than two dozen states and the District of Columbia already have minimum wages higher than the federal one. Even in those states, an increase in the federal minimum wage probably will have a ripple effect, increasing the salaries of Townsend and others.
North Carolina raised its minimum wage from $5.15 to $6.15 in January.
  Democratic presidential hopeful John Edwards delivers a speech in Prestonsburg, Ky., Wednesday, July 18, 2007. (AP Photo/Ed Reinke) (Ed Reinke - AP) 
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"It's a long overdue first step," said Cindia Cameron, the national organizing director of 9to5, the National Association of Working Women. Minimum wage workers typically are young, single and female and are often black or Hispanic.
Even then when the full increase is enacted, minimum wage workers will be just scraping by. "It's not enough money to meet your basic needs, I'm talking about your rent, your gas, and gas to get back and forth to work," said Sonya Murphy, head organizer of the Mississippi Association of Community Organizations for Reform Now, or ACORN.
But at the same time, employers who pay many of these low-wage workers say increasing the minimum wage only means they have to raise the prices of the products, cut back on employees' hours or let some workers go.
"When you go into the grocery story now, you may be checking your own groceries, you may be bagging your own groceries," said Jill Jenkins, chief economist for the Employment Policies Institute. "All of these things are because of mandated wage hikes. When you have to pay more, employers begin to find other options to keep costs down."
According to the National Restaurant Association, the last minimum wage increase cost the restaurant industry more than 146,000 jobs and restaurant owners put off plans to hire an additional 106,000 employees.
At $7.25 an hour, the most likely response from restaurants will be "increases in menu prices, elimination of some positions and reduction of staff hours to try and offset some of the increased labor costs," said Brendan Flanagan, the association's vice president of federal relations.
Others say the effect on the economy will be negligible.
A PNC Economic Outlook survey done in April showed three out of four small- and middle-market business owners said raising the minimum wage would have little or no impact on their businesses. "In a tighter labor market, they already raised wages to be competitive," said Stuart Hoffman, chief economist for PNC Financial Services Group.
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On the Net:
Labor Department background on the minimum wage: http:/
Characteristics of minimum wage workers: http:/
