The federal minimum wage increases 70 cents an hour today, from $5.85 to $6.55 per hour, but local employment officials say almost no workers in the region will be affected immediately because local employers already pay more.

“I’m not sure we get a lot of jobs that are strictly just minimum wage. Most employers pay a little bit better,” Andrea Witt, Tennessee Career Center coordinator at the state employment office’s Chattanooga location, said earlier this week.

“On the list we have out front today, most of the jobs are $9, $10, $8. We’ve got only one that is $6.55 (an hour) for a food service worker,” she said.

In a report released in March, the U.S. Bureau of Labor Statistics found that of Tennessee’s 1.6 million hourly paid workers over age 16, only about 39,000 make at or below the federal minimum wage.

Of the nation’s 75.8 million hourly workers, a little more than 1.7 million — 2.3 percent of all hourly paid workers — made at or below the minimum wage in 2007, according to the same report.

Today marks the effective date of the second raise in a three-part installment of minimum-wage increases enacted by Congress in the Fair Minimum Wage Act of 2007. Last July, the legislation raised the minimum wage from $5.15 an hour to $5.85. This year’s $6.55 rate will be raised again next July to $7.25.

The law prompted a battle between Democrats in Congress and President Bush and Senate Republicans, and some economists say it still sparks debate, especially in the 23 states that haven't already boosted their minimum wage.

Officials with the labor-backed Economic Policy Institute have said 10 percent of the nation's work force would see benefits from the raise, with 5.6 million workers directly affected and 7.4 million gaining a “trickle-up” wage effect, in which those who already make in the general realm of minimum wage get pay boosts, too.

But others say the mandatory increases are little more than political moves that will have little impact beyond the trickle-up higher prices of goods for consumers.

“It takes some time for the adjustment to work its way through (the economy), but it will work its way through to increased wages in general,” said Dr. Bruce Hutchinson, professor of economics at the University of Tennessee at Chattanooga.

“That’s not necessarily good at the end of day, because each business has to generate revenues that are going to cover expenses,” Dr. Hutchinson said. “As wages go up, unless they increase productivity, the only other way to cover expenses is for the price of products or services to increase.”

Economist Matt Murray, associate director of the University of Tennessee’s Center for Business and Economic Research, called the issue “political volleyball” and said proponents on both sides tend to overstate the effects.

“Minimum wage for most workers does not even apply,” Dr. Murray said. “It does lead to some salary compression, but I don’t think the effects are likely to be noticeable. At least not until next year, when the wage goes to $7.25.”

Dr. Murray said training and more education are better ways to stimulate wages and income stability.

Local impacts

Ralph Faulkner, 67, a retiree from Sara Lee, is likely to get a little more pocket change to supplement his Social Security and pension incomes, according to his boss, Wayne Orr, general manager of the city-owned Brown Acres Golf Course.

Though Mr. Faulkner already makes more than minimum wage in his part-time job as a golf shop operator, the minimum-wage jump may be just enough to give him a slight boost for his 21/2 days a week at work.

“I enjoy working here and passing the time,” Mr. Faulkner said, adding with a wink that it also makes for a better relationship with his wife.

Mr. Orr said most of the part-time and seasonal workers at the golf course have been making between $5.85 and $6.50 an hour. He said he doesn’t expect the slight bump for the 12 to 16 temporary workers to have much impact on the course’s budget.

Other local employers and temporary staffing coordinators say they know of very few workers who will be affected.

Pilgrim’s Pride Corp. spokesman Ray Atkinson said starting wages at the two poultry processing plants in Chattanooga already top even next year’s $7.25 minimum wage installment.

“Our lowest starting rate at the cook plant is $8.10 and at the deboning plant is $9.09. Those are day-one, entry-level wages,” he said.

After a 60-day probationary period, cook-plant workers can rise to $8.30 and $9.15 an hour, and workers at the deboning plant can rise to $9.20 and $10.50 an hour, depending on their jobs, he said, “plus, we have a competitive benefits plan.”

Mark Campbell, owner of Manpower Inc. in Chattanooga, said he doesn’t know of anyone in Chattanooga paying minimum wage.

“Really, the market kind of sets the wages, along with supply and demand,” Mr. Campbell said.

ATS Staffing Services President Matt Hodges said the wage change “trickle-up” could hurt some businesses and “the average consumer is not likely to be pleased with it.”

Jason Burns, executive director of Optimum Staffing Services Inc., agreed that marketplace reactions could happen.

“Some companies may not bring on the lowest entry-level workers,” he said. “They may just let some of those positions go.”

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