Minimum Wage Up, But Report Says New Rate Still Too Low

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The Federal minimum wage goes up today to $7.25 an hour. That's a 10 cent increase for workers in New York State which has had a minimum wage of $7.15 an hour since 2007. A report by the Fiscal Policy Institute says the new rate is still too low. WNYC's Cindy Rodriguez has more.

REPORTER: The report says during the 60's and 70's minimum wage was about equal to the poverty rate for a family of three. But during the 80's and 90's that changed. And now minimum wage workers earn 20 percent below the three person federal poverty line.

According to the report, 13 states have minimum wages above the new federal standard. And 10 states link their minimum wage to a cost of living index - though some exempt smaller businesses.

James Parrot, Director of the Fiscal Policy Institute, says a gradual increase each year is better than big jumps every five to ten years which is what New York State has done. Rebecca Marion, from the Retail Council of New York State, says that's fine when the economy is doing well but when no one is shopping increasing wages is difficult and businesses could close. For WNYC, I'm Cindy Rodriguez.