Minimum wage increases – Minimum-wage workers get 70-cent raise

Megan Rhea had good reason to flash a smile yesterday. With the federal minimum wage increasing from $5.15 to $5.85 an hour, it means Rhea received a 70-cent raise.

‘That’s a lot of money actually,’ said Rhea, a rising junior at Warren County High School. She says she’s been working part time, about 10 hours a week, at Kingwood Foodland since Christmas.

Rhea is one of 11 part-time workers at Kingwood Foodland who received a 70-cent raise yesterday. Grocery store owner Noel Pepper says the minimum raise hike will increase his weekly payroll by around $150.

‘I’m all for giving the kids a raise and this is long overdue,’ said Pepper. ‘We’ve always been able to adjust and we’ll adjust to this. I think it will hurt the restaurants more than the grocery stores. You might see the price of a hamburger go up faster than a gallon of milk.’

Pepper said the minimum wage hike has pushed up his entire pay scale. He said his workers who earn more than minimum wage will get a slight pay increase too.

‘That’s only fair,’ said Pepper, who has owned Kingwood Foodland for 23 years.

Tuesday was the first time in 10 years the minimum wage has been raised. It ends the longest span without a federal minimum wage increase since it was first enacted in 1938.

The last minimum wage increase came in September 1997 when President Clinton signed a bill raising the minimum 40 cents to $5.15 an hour.

Legislation signed by President Bush in May increases the wage 70 cents each summer until 2009, when all minimum-wage jobs will pay no less than $7.25 an hour.

At Wal-Mart, Warren County’s largest retailer, store manager Steve Phillips said the minimum wage increase won’t have an impact because all employees in McMinnville make at least $6 an hour.

‘We always pay well above minimum wage,’ said Phillips. ‘When this next round of increase comes around, it will get us and there will have to be an adjustment at the corporate level for that.’

Phillips also said employees receive a raise after 90 days so even those who start at $6 an hour don’t keep that wage for long.

At Big Lots, about a quarter of the store’s 17 employees received a 70-cent pay raise yesterday. The pay scale there is also changing to compensate employees on the higher end.

At Medley’s Diner, owner Junior Medley says none of the minimum wage increases will affect his payroll, even up to $7.25 an hour in 2009.

‘I don’t have much turnover because my crew makes good money,’ said Medley.

A person working 40 hours per week at the former minimum wage of $5.15 made about $10,700 a year. The raise to $5.85 an hour increases that to $12,168 a year before taxes. The increase to $7.25 will boost that to just over $15,000 a year.