State raises minimum wage

By Matthew Boyle | mboyle@flagler.edu

The state of Florida raised minimum wage from $6.79 per hour to $7.21 per hour on Jan. 1.

“When you look at minimum wage law and legislation, you almost think, ‘This is kind of a slam dunk,'” Flagler College Instructor of Economics and Law, Robert Berger said.

However, minimum wage law and government intervention in economics has long been a heated topic of debate.

“To oppose an increase in minimum wage would kind of like being opposed to motherhood, or honesty or apple pie,” Berger said.

Yet, the increase may hurt minimum wage workers more than help them.

“In many instances where the employer has been found to be affected by minimum wage, they will substitute what we might call, more qualified minimum-wage workers, for example, college students,” Berger said.

Unemployment may rise with the recent increase in minimum wage.

This may hurt many of the people that this initial raise in minimum wage was meant to help.

“There’s some downside and there are some costs that we have to take into consideration. A lot of those costs sit around the issue of unemployment,” Berger said.

The minimum wage increase adds an extra $16.80, before taxes and deductions, to a 40- hour work week.

To many though, the extra $16.80 may mean the difference between access to some of the basics necessities of life.

According to Berger, an increase in minimum wage can also result in inflation, which is often considered a negative consequence of the increase in minimum wage.

Products that workers could easily afford before the raise now have the potential to become more expensive. Employers and the rest of the economy try to make up for the this increase with their wallets.

The Department of Labor increased federal minimum wage to $5.85 in July 2007. After this initial change, the federal minimum wage was increased again to its current amount, $6.55 in July 2008.

The federal minimum wage will remain at $6.55 until July 24, when the United States Department of Labor will raise the number to $7.25.

When the Department of Labor raises the federal minimum wage to $7.25, minimum wage employees in Florida will receive a four cent increase in wages because federal labor law states that minimum wage employees must receive the better wage between state and federal minimum wages.

According to Berger, the immediate short-term benefits of this increase in minimum wage could outweigh the long-term negative consequences, given the current economic recession.

“In light of the present state of affairs, we’ve got to develop,” Berger said.

“We can really think of this as one form of a stimulus packackage.”