Doom and Gloom: The Minimum Wage Hike

Yesterday marked the first day in more than 10 years that millions of minimum wage workers received a pay raise. Their hourly pay jumped from $5.15 an hour to $5.85, the first of three raises Congress approved that will bring the rate to $7.25 an hour in 2009. Despite that 70-cents per hour hike, the minimum wage is now at its lowest buying power in more than half a century.

Republicans and big business fought the increase tooth and nail, saying the higher federal minimum wage could mean fewer hours for employees, fewer pay increases for other employees, benefits reductions, job losses and waning job creation.

There was even an attempt to repeal the minimum wage. On January 24th, 28 U.S. senators (Republicans all) voted “yes” on an amendment from Wayne Allard (R-CO) that would have scrapped the federal minimum wage 69 years after its creation.

Fortunately, wiser heads prevailed and minimum wage workers have finally received a small raise. Now let's see if those doom and gloom predictions prove true. Or if those who made such predictions will admit they were wrong. I'm betting "No" on both.