An increase in the federal minimum wage that will take effect July 24 will raise the pay of millions of workers and also help stimulate the economy. The increase is the final in a three-tiered hike that will increase the minimum wage 10.7% to $7.25 per hour. Earlier this year, EPI Policy Analyst Kai Filion calculated that the upcoming increase will generate $5.5 billion in consumer spending over the next 12 months. Despite that promising research and the fact that the planned increase was legislated long before the current recession began, multiple critics are now suggesting that a wage hike for America’s lowest-paid workers will hurt the economy. Economist Heidi Shierholz and other EPI experts have assembled a body of research that shows why the higher minimum wage is, in fact, good for the economy, good for the country’s poorest workers, and long overdue. Much of that work is summarized in Millions of workers will benefit on the EPI web site. Along with boosting consumer spending, EPI research finds that raising the minimum wage will bring some badly needed income to workers living near the poverty line. An individual earning the new minimum wage of $7.25 per hour working full time would earn an annual income of $14,500, which is still below the federal poverty level for a family of two. continue reading