By CHRISTOPHER S. RUGABER, AP Business Writer Thu Jul 24, 7:56 AM ET

WASHINGTON - About 2 million Americans get a raise Thursday as the federal minimum wage rises 70 cents. The bad news: Higher gas and food prices are swallowing it up, and some small businesses will pass the cost of the wage hike to consumers.

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.

Workers like Walter Jasper, who earns minimum wage at a car wash in Nashville, Tenn., are happy to take the raise, but will still struggle with the higher gas and food prices hammering Americans.

"It will help out a little," said Jasper, who with his fiancee support a family of seven, and who earns the minimum plus commissions when customers order premium car-wash services.

The bus fare he pays each day to get to work already went up to $4.80 this spring from $4. "I'd like to be on a job where I can at least get a car," he said.

Last week, the Labor Department reported the fastest inflation since 1991 — 5 percent for June compared with a year earlier. Energy costs soared nearly 25 percent. The price of food rose more than 5 percent.

So the minimum wage hike is "a drop in the bucket compared to the increases in costs, declining labor market, and declining household wealth that consumers have experienced in the past year," Lehman Brothers economist Zach Pandl said.

The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.

Twenty-three states and the District of Columbia have laws making the minimum wage higher than the new federal requirement, a group covering 60 percent of U.S. workers, according to the Economic Policy Institute, a think tank.

"You get desperate, because you can't really pay for everything," said Gladys Lopez, 51, a garment worker from Adjuntas, Puerto Rico, who makes military uniforms and has earned the federal minimum for 18 years.

She says she would need to make at least $50 more a week to pay all her bills and take care of her 84-year-old mother, whom she supports.

When the minimum rises again next year, catching up with more states, more than 5 million workers will get a raise, said Lisa Lynch, dean of the Heller School for Social Policy and Management at Brandeis University.

Some small businesses are already making plans to raise prices to offset the higher wages they have to pay their workers.

David Heath, owner of Tiki Tan in College Station, Texas, said the increase will force him to raise prices for his monthly tanning services by about 12 percent. Tiki Tan had been paying its employees $6 per hour.

"There just isn't any room for profit, and so this is why prices will have to go up," he said, citing the wage increase and higher fuel costs. "I have to recoup those costs."

The increase in the minimum wage could push food prices even higher by rising the pay for agricultural workers, said Brian Bethune, chief U.S. economist at consulting firm Global Insight.

But he said he did not expect the change to have a major impact on the economy because recent increases in productivity, which enables companies to produce more with fewer workers, are keeping labor costs in check.

That makes it unlikely the minimum wage increase will trigger a "wage-price spiral," in which workers facing higher costs demand more pay, which in turn causes companies to raise prices higher, sending inflation coursing through the economy.

And most businesses, even restaurants and other service sector companies, already pay above the minimum wage anyway. Dan Whitaker, general manager at Anis Bistro in Atlanta, a casual French restaurant, said employees earn at least $8 an hour.

"You can't get a dishwasher for minimum wage," he said.

sorry Tyler it did not show a link it was on aol start up page..

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http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country
minimum wages all over the world

Thanks Mays~your my hero:)

I was amazed to read, that the minimum wages in the United Kingdom are the highest in the world.

yes I was also ours has been stuck until lately I don't remember when congress ask for a minimum wage increase seems like 2001??

Oh, it is adjusted for inflation every year here.

ur alls cost of living is higher than ours also? like food,clothes and utilities,housing?

I dont know if the cost of living is higher here.
Filling your car's tank sure is much more expensive.
4 Dollars a gallon would be considered a giveaway here; we pay approx. 10 Dollars.
A liter (you call that a quart?) of milk costs me 83 cents, which is approx. $ 1.32. I have no idea, what you have to pay over there.

I buy my milk by the gallon it is 4;00d ollars + a gallon

gypsy wrote:ur alls cost of living is higher than ours also? like food,clothes and utilities,housing?

utilities means gas and electric, I suppose?
for that I pay 240 Euro's each month. If you want to know the amount in dollars, you need to multiply the amount with 1.59.
if one has to rent a house like I have, I estimate it would cost approx. 600 Euro s a month.
my internet connection is 19.95 Euro s p. month.
Dont ask me the prices of fruit or vegetables-I dont buy them; much too healthy :-)
I can tell you the price of tobacco however, lol

haha oh my!! Mays, I don't buy tobacco ,we neither one smoke ,chew, snort, or dip LOL
here for a 1 bedroom apt one will pay about 500 a month in town usually that is utililties/water and garbage included.. utlities/electric we pay about 300 a month year round but we belong to a co-op so we get a dividend check~

We don t have any utility co-ops here unfortunately.
I read about them in other posts on these boards and it looks like a very good communistic solution.
Utility used to be a government business, but it has been privatised, like public transportation and the post; things that should have stayed in the hands of authorities.
The only thing that worked out well for everyone was the telephone.
Tariffs are much much lower now than in the past; not that it makes much difference for me, for I hardly ever make a phone call.

I use my cell phone for long distant calls~

our phone company is a co-op also, it does make it nice to recieve a check once a year from both..electric and phone..

gypsy wrote:our phone company is a co-op also, it does make it nice to recieve a check once a year from both..electric and phone..

Interesting.
I wonder why we dont have that here, for it seems like a good idea.
The only co-op I m a member of, is an insurance company and indeed I get a payment from them every year, not by check, for we don t use those things.
They send you a letter in which the amount of your "profit" is being mentioned and they telebank it to their members.

checks have almost been eliminated here we use debit cards, and the statement is just photo copies of original checks~ some day we will not use checks either..

Mays Gilliam wrote:We don t have any utility co-ops here unfortunately.
I read about them in other posts on these boards and it looks like a very good communistic solution.
Utility used to be a government business, but it has been privatised, like public transportation and the post; things that should have stayed in the hands of authorities.
The only thing that worked out well for everyone was the telephone.
Tariffs are much much lower now than in the past; not that it makes much difference for me, for I hardly ever make a phone call.

my last gas bill was about 40 bucks, i get it through a small city that idont live in but close, they buy it from ala gasco, which is alabama gas, most ppl get it straight from alagasco,that live in other areas, but i only heat water in the summer, its more in the winter since i heat with central heat, using gas, its usually between 150 bucks to 200 for heat and water to heat water , . i also get my water bill thought the same place they are on the same bill,, my water is usually about 25 bucks but is included in that 150 -200 number, , my elecric bill in the winter is like 70 to 80 bucks, but like 150 to 200 in the summer because i have central air, ans keep the house fairly cool, , now at the lake i have a well for water, u can get on city water but my well has worked good since the 60s, my power is from tennesee valley authourity,it was a government thing to bring power to poor rural areas many years ago. who bought up land and backed up water ,there were even movies about it, hydro power, i am on the city in the counry im in elecric co-op, just country ppl and nice ppl, more down home style that alabama power im on here. and at the lake does a good job, but so does alabama power,, i pay a small fee everyyear to be a member of the co-op,. like 30 bucks at the lake, the co-op was down fixing the service cable going to my sisters, and said" hey this transformer is kind of small, so they radioed in and had a larger transformer put on the poll for my place and my sisters, since i only go in the summer and fall some and some in the spring, i may pay 45 bucks for elec, in the summer as i keep the place not cool but cold, everyone fusses, but in the winter i just pay the minimum of 25 dollars, i have gass central heat i dont use, i dont go when its real cold in the winter as i have alll the water lines drained, , but i use the space heaters in the fall, they work well once u get it warm, the stove uses propane, and we dont use much, as my sister has elecric stove, so we usually bake there, we dont us my oven, but just the stove top, my propane bottle is hard to handle, it weights 175 pounds full, and i just have not ran a line to move it to were it would be easier to get to,oh at the lake we just use our cell phones and do not have land line service, since we only go on some weekends,my house is larger ofcouse than the lake but both are 3 bedroom 2 bath,this weekend as im fixing ot leave will be the first time my baby grandson will spend the nite up there, so i got to get a move on as the grass will be high,,