Relief for Workers at Bottom: Minimum Wage Goes Up

Workers in 38 states will see higher paychecks starting today.

ByABC News
July 23, 2009, 4:44 PM

July 24, 2009— -- Isaiah Reed barely gets by, working about 20 hours a week on the grill at a Nashville, Tenn., Wendy's.

His salary: just $7 an hour. That's $560 a month, if he gets all of his hours. Reed rides the bus to work, has a roommate and is on TEXTfood stamps but still struggles to pay the bills.

Today, Reed and millions of other Americans get a raise as the federal minimum wage increases 70 cents to $7.25 an hour.

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Reed already earned more than the old minimum wage, so he will only see his salary climb 25 cents an hour.

"It's good thing, but it could be better," he said. "But hey it's increasing."

Reed, 18, plans to enter community college in January to become a nursing technician. For him, every penny counts.

"We're working for million-dollar franchises such as McDonalds, Burger King and Wendy's. We serve a lot of people and in this economy it's hard to get an extra job," Reed said. The raise, "It's like an extra meal."

Today marks the third and final in a series of increases passed by Congress and signed into law by President Bush on May 25, 2007.

At that time, the minimum wage was $5.15 an hour and had not been increased for a decade. Congress approved three 70-cent increases which brought pay up to $5.85 in 2007, $6.55 the following year and now $7.25 an hour.

For a minimum-wage employee working a 40-hour work week, that means an extra $28 in pay, before taxes. It's not much, but in this recession, every little bit helps.

The rate hike does not affect workers in 18 states and Washington, D.C., which already have their own minimum wages of $7.25 or higher. In 23 states workers will see the full raise. In nine other states, workers salaries were higher than the $6.55 but below the $7.25 an hour rate.