Minimum Wage to Increase

That should help “create or save” jobs!

The federal minimum wage is set to increase later this month as the job market shows signs of further decay.

The federal minimum wage will go to $7.25 an hour on July 24 from its current level of $6.55, according to the U.S. Department of Labor.

The impact will be felt in 29 states, and many of them plan to match the federal minimum when it goes through.

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Unemployment has increased for nine months straight, achieving a 26-year high of 9.5% in June, according to the Labor Department.

Also in June, the U.S. job market shed 467,000 jobs, compared to a loss of 322,000 jobs the month before. Altogether, the U.S. economy has lost nearly 3.4 million jobs in the first half of 2009, which is more than the 3.1 million lost during all of 2008.

Many workers have taken jobs that pay far below what they’re used to. Other people have given up looking. The number of people who have been unemployed for more than six months has reached nearly 4.4 million, meaning that benefits for some of the unemployed have expired.

John Lonski, chief economist for Moody’s Investors Service, said the hike in the minimum wage is “going against the grain” of the economy, and that the job market might not be able to absorb the mandated increase.

Perhaps we can create a federal program to reimburse troubled employers who pay the minimum wage (or a derivative thereof).