• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Personal Profitability Logo 2016

Personal Profitability

Personal finance for hustlers and entrepreneurs

  • Start Here
  • About
    • Personal Profitability Bootcamp
    • Create Your Website in 5 Minutes!
    • Profitability Resources
    • Media & Interviews
  • eBooks
    • The Personal Profitability Complete Beginner’s Guide to Personal Finance
    • Personal Finance Arsenal eBook
  • Blog
    • Income Reports
  • Podcast
  • YouTube
  • Contact / Work With Me
    • Profitability Coaching

Minimum Wage Increses

July 15, 2009 by Eric Rosenberg

Share
More
Tweet
Pin
Share

On July 24, 2009 (that’s less than two weeks), the United States minimum wage will increase from $6.55 per hour to $7.25 per hour.  That is a difference of $1456 per year for impacted minimum wage employees.  That might not sound like a lot to some of us, but it will bring people a roughly 10% raise.  In the UK the minimum wage is set to increase 3.8% (SPONSORED LINK)

This increase is not necessarily coming at a great time for employers, but it is great timing for employees and the economy as a whole.  As each struggling employee, as most minimum wage earners are, gets a 10% raise, those people will (hopefully) be able to live in better conditions.  Those extra funds will also likely be coupled with an increase in total consumer spending.  As spending increases, the economy benefits.

If I were going to give advice to struggling minimum wage earners about to get a raise, I would tell them not to blow through the increase in pay as quickly as it comes in.  Like anyone who gets a pay increase, these people should try to keep their standard of living the same (or increase modestly) while increasing their saving for the future.

Unemployment continues to be a big issue, however, that will not be impacted by an increase in minimum wage.  In fact, the opposite might occur.  As businesses struggling to remain profitable will endure increased labor expenses, they might decide to lay off more employees.

Do you think the increase in minimum wage is a good thing?  Do you think more people will benefit than be harmed.  I believe, in the long run, it is a good step.  The government needs to ensure every full time worker is earning a livable wage.  The current minimum wage full time annual earnings are $13,624 per year.  The new annual earnings will be $15,080 per year.  I think most of us would hardly call that a livable wage.

Related

Share
More
Tweet
Pin
Share

Filed Under: Earn More, Economy

About Eric Rosenberg

Eric is the founder and editor of Personal Profitability. He left his corporate finance job in 2016 to take his online side hustle full-time and now earns a six-figure online income.

Get the free Personal Profitability Playbook Instantly

Enter your first name and email address to get your free download and join the Personal Profitability Community.

Reader Interactions

Comments

  1. Jacob says

    July 16, 2009 at 3:34 am

    Take a look at the government statistic on the number of people who are paid the minimum wage: http://www.bls.gov/cps/minwage2008.htm

    Some highlights:
    Over 50% of those making at or below the minimum wage are under 25.
    About 7 in 10 workers earning the minimum wage or less in 2008 were employed in service occupations, mostly in food preparation and serving related jobs.

    • eric1985 says

      July 16, 2009 at 3:35 pm

      Thanks for the link Jacob. That is a good point. It looks like only about half of minimum wage earners are realisticaly trying to earn a living from their paycheck. Many are kids living at home with their parents.

  2. Darrell Houghton says

    July 17, 2009 at 2:04 am

    As Jacob has pointed out, minimum wage jobs are for people in high school or just starting out. For employers, the biggest expense is labor. When the cost of labor goes up, employers don't just absorb the cost, they have to cut back somewhere, and there's a good chance they will do so by laying people off.

    If kids out of high school want to earn more money, they should be taught to stay in school so they will be worth more to their future employers. Eric, that's why you're in school, right? Heck, why not raise the minimum wage to $20 an hour. That would enable consumers to spend more and help us get out of this recession, right? Except of course it won't do much good for the 9.5% of us who are unemployed.

  3. Darrell Houghton says

    July 30, 2009 at 4:21 pm

    Here's an informative article entitled "A Minimum Wage Equals Minimum Jobs": http://tiny.cc/yUFsS A great counterpoint to the argument for a "living wage".

Primary Sidebar

Connect with Me!

  • Facebook
  • Instagram
  • Pinterest
  • Twitter
  • YouTube

Join the Email List

This field is for validation purposes and should be left unchanged.

Subscribe to get on the path to Personal Profitability

  • Bootcamp
  • Podcast
  • YouTube

I started a little side hustle blog in 2008, and left my full-time day job as a Senior Financial Analyst to turn my side hustle into a full-time gig. Learn how I did it so you can build your side hustle. It all starts with the first dollar.

Copyright © 2022 · Narrow Bridge Media, Inc. · All Rights Reserved

Go to mobile version