Minimum-wage workers to get a pay bump today

Waitress Keeda Gilly wiped off the counter yesterday at Brothers Breakfast & Lunch on Chelten Avenue in Philadelphia's Germantown neighborhood.

Gilly, who earns minimum wage, had no idea that starting today, she will be entitled to a raise. "Really?" she said, pausing mid-wipe.

The federal minimum wage increases to $7.25 an hour from $6.55. The raise is the final part of a three-step hike Congress passed in 2007 when the minimum wage was $5.15 an hour.

In Pennsylvania, New Jersey, and Delaware, where the minimum wage already was $7.15 an hour, the 10-cent increase to $7.25 is less steep.

"Today's minimum wage is not only good for our workers, but for our economy," U.S. Secretary of Labor Hilda L. Solis said in a telephone news conference yesterday. She said the increase will generate an additional $5.5 billion in spending by consumers over the next year, stimulating the economy.

Not everyone agrees.

Kevin Shivers, Pennsylvania state director of the National Federation of Independent Businesses, said the increase will hurt businesses that already are struggling and may discourage hiring.

"Right now, the biggest challenge facing small businesses is cash flow," Shivers said. "The 10 cents may not be significant, but in the context of possible increased taxes and the fact that people aren't buying, it is a problem."

Nationally, the increase amounts to 10.7 percent and comes at a time when average hourly earnings have increased 2.7 percent annually, according to the U.S. Labor Department. Locally, the 10-cent increase equals a 1.2 percent pay hike.

The minimum wage would have to be $9.15 an hour to equal the hourly minimum wage of $1.60 in February 1968 - when it was at its highest, relative to inflation, said economist Andrew Green at the Economic Policy Institute in Washington.

That's why worker advocates say the current increase is not enough. In his 2008 election campaign, President Obama promised to boost the minimum wage to $9.50 by 2011.

Solis said she had no plans to seek another increase.

Instead, she said, her department would beef up enforcement of wage laws by adding 250 inspectors to a staff of approximately 650.

Her comment came on the same day the U.S. Government Accountability Office released an audit criticizing the Labor Department for inadequate investigation into wage complaints and lax enforcement of the rules. The GAO investigation took place in 2007.

"Our work clearly shows that Labor has left thousands of actual victims of wage theft who sought federal government assistance with nowhere to turn," the report said.

On Chelten Avenue yesterday, Sun Kim, owner of Sun's Discount Center, said the 10-cent pay hike wouldn't be a major problem in itself - he already pays more. But he was concerned about the combination of higher insurance premiums, higher oil prices, higher utility bills, higher taxes.

"Small business is having a hard time," he said. "Everything is up, up, up, and business is staying down."

At Brothers, the restaurant's owner said that she did not understand what changes were afoot, and that she was too busy making breakfast for customers to think about them.

Gilly, 22, of Germantown, said she's managing, barely, on her minimum wage, even though her hours have been cut.

"You learn to adapt," she said. "When there's a recession, it's hard to find another job. Right now, slow money is better than no money."