PARKERSBURG - Many local residents got a pay raise Thursday as did 2 million other Americans as the federal minimum wage increased 70 cents from $5.85 to per hour to $6.55.
George Kellenberger, chairman of the Chamber of Commerce of the Mid-Ohio Valley, said minimum-wage increases are a double-edged sword.
"There are pros and cons. It helps these people on minimum wage buy what they need to live, but also has an impact on the cost of living. It's inflationary and the cost is passed on to the consumer groceries and everything else will cost more," he said.
Ohio's minimum hourly wage increased Jan. 1 from $6.85 to $7.
West Virginia has a minimum-wage law of $7.25 per hour, but it applies to few businesses. The state minimum wage law only applies to the state government and companies with gross earnings of more than $500,000, and even those companies are exempt if less than 80 percent of employees are engaged in interstate commerce.
Applicable interstate commerce, as defined by the West Virginia Division of Labor, could be something as simple as processing a credit-card purchase, sending business e-mails across state lines, driving across state lines or even driving on a federal highway
The increase does come at a time of rapid inflation, the worst in nearly 30 years, according to the U.S. Labor Department.
Last week, the labor department reported the fastest inflation since 1991, 5 percent for June. Energy costs soared by 25 percent and the price of food rose more than 5 percent.
The increase from $5.85 to $6.55 per hour is the second of three annual increases required by a 2007 law. Next year's boost will bring the federal minimum to $7.25 an hour.
The spending power of a minimum-wage earner, even with the increase, is still less than what it was 20 years ago, the labor department said. When adjusted for inflation, a minimum-wage earner in 1997 made the equivalent of $7.02 per hour in todays dollars and 40 years ago, federal minimum wage was the equivalent of $10.06 per hour today, the department said.
Preliminary data in a study by the Employment Policies Institute to be released in the fall found that for every 10 percent increase in the minimum wage, employment among 16-29 year olds without a high school degree decreased between 6 percent and 14 percent.
"Decades of economic research clearly demonstrate that minimum wage hikes result in job loss for the most vulnerable members of the economy," said Rick Berman, executive director of the institute. "The unintended consequences of Thursday's hike is pricing low-skilled working Americans out of the job market and increasing unemployment among those groups that need help the most."
