The increase in the state and federal minimum wages set for July 24 will put pump millions of dollars into the pockets of tens of thousands of Idaho’s lowest paid workers over the next year.
The minimum wage will increase from $5.85 to $6.55 an hour under state and federal laws passed in 2007. It is the second of three increases that will set the wage at $7.25 an hour a year from now. The wage rose from $5.15 to $5.85 an hour on July 24, 2007, providing pay raises for over 19,000 workers that totaled more than $12 million in the past year. It was the first increase in the minimum wage in a decade.
Over 40 percent of those receiving a pay boost in 2007 worked in leisure and hospitality, which includes restaurants, hotels and recreational businesses. Another 17 percent were in some segment of retailing.
The same types of workers will likely benefit again this year although more detailed estimates will not be available for several more weeks. Rising unemployment across the state has taken pressure off the labor pool, and that could affect employer decisions on hourly wages since competition for qualified workers has eased from a year ago.
States are not required to adhere to the federal minimum wage, but the Idaho Legislature voted last year to make Idaho’s basic minimum wage identical to the federal minimum so that any change in the federal minimum wage would immediately be reflected in the state minimum. The federal minimum wage applies only to workers for businesses involved in interstate commerce or with gross receipts of $500,000 or more a year. The state minimum wage covers all other workers.
The minimum wage for Idaho employees in jobs where they earn tips — bartenders, waiters and waitresses, for example — remains unchanged at $3.35 an hour. But employers must ensure that tips provide another $3.20 an hour so that tips combined with wages equal at least the new minimum. If the combination falls short, the employer is required to make up the difference.
Idaho currently has about 665,000 nonfarm jobs and another 50,000 agricultural jobs during the summer, which are also covered by state or federal minimum wage laws.
July’s minimum wage increase is likely to have the least impact in the northern part of the state. Employers in border cities like Moscow, Lewiston and metropolitan Coeur d’Alene have had to boost wages well over the minimum to compete for qualified workers with businesses in Washington, where the minimum wage is $8.07 an hour. Oregon’s minimum is $7.95 an hour.
The various labor law posters required to be displayed by employers including the one on minimum wage are available free of charge from the Idaho Department of Labor on its Web site at http://labor.idaho.gov/dnn/idl/Publications/tabid/672/Default.aspx#IdahoLabor.
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