WASHINGTON, July 24 (UPI) -- A 70-cent increase in the U.S. minimum wage -- the first in 10 years -- took effect Tuesday, raising 13 million workers' pay to $5.85 an hour.
Analyst Liana Fox of the labor-backed Economic Policy Institute told CNN the increase didn't affect 90 percent of the nation's workers but was important because the minimum wage had been at a 52-year low, when adjusted for inflation.
The minimum wage is set to rise twice more in the next two years until it reaches $7.25 an hour.
"It's a basic wage floor," said Fox, who noted other costs have risen since the federal wage was last increased in 1997.
Economics professor Steven Davis of the Chicago School of Business, who is also a visiting scholar at the right-leaning American Enterprise Institute, told CNN increases in the minimum wage could cause employers to respond by looking to reduce labor costs.
He suggested the government reduce the payroll tax on earnings for workers and employers rather than increase the minimum wage, CNN said.
