Today’s the day that the last step of the minimum wage increase passed by Congress in 2007 goes into effect:

The U.S. Department of Labor reminds employers and employees that the federal minimum wage will increase to $7.25 on Friday, July 24. With this change, employees who are covered by the federal Fair Labor Standards Act (FLSA) will be entitled to pay no less than $7.25 per hour.

“This administration is committed to improving the lives of working families across the nation, and the increase in the minimum wage is another important step in the right direction,” said Secretary of Labor Hilda L. Solis. “This well-deserved increase will help workers better provide for their families in the face of today’s economic challenges. I am especially pleased that the change will benefit working women, who make up two-thirds of minimum wage earners.”

This increase is the last of three provided by the enactment of the Fair Minimum Wage Act of 2007, which amended the FLSA to increase the federal minimum wage in three steps: to $5.85 per hour effective July 24, 2007; to $6.55 per hour effective July 24, 2008; and now to $7.25 per hour effective July 24, 2009. The latest change will directly benefit workers in 30 states where the state minimum wage is currently at or below the federal minimum wage, or there is no state minimum wage. It will also benefit workers in the District of Columbia, where the minimum wage is required to be $1 more than the federal minimum wage.

The Washington Post finds that, unsurprisingly, business doesn’t think right now is a good time to increase the minimum wage. But then, business never thinks it’s a good time to increase the minimum wage; when times are flush, they say it would kill the goose that’s laying the golden eggs, and when times are tight, they say it would force them to make things worse by laying people off. Despite the Catch-22 quality of their arguments, though, they managed to prevent any increase from being enacted for ten full years before 2007, leaving today’s inflation-adjusted minimum wage, even after the latest increases, at only 83% of where it was in 1968.

And it’s important to remember as well that the Federal minimum wage doesn’t apply to all workers. Workers who receive more than $30/month in tips, for instance, have a different minimum — just $2.13/hour — and their minimum wage hasn’t been increased in 18 years.

A new report released by the National Employment Law Project this week describes the result of this stagnation — millions of tipped workers struggling just to stay above the poverty line:

Industries employing tipped workers represent some of the lowest paid jobs in the U.S. economy. In fact, the U.S. Department of Labor’s Bureau of Labor Statistics cites food preparation and service as the nation’s single lowest paying industry. Other industries employing tipped workers, such as nail salons and car washes, also pay poverty-level wages.

Even after accounting for tips, the vast majority of tipped workers are still barely getting by. According to our analysis of Current Population Survey data from 2005-2007, tipped workers nationwide earn a median wage of $8.23 per hour including tips, or just $17,118 annually (in 2007 dollars). Waitresses and waiters earn slightly more, but still only $9.00 per hour including tips or $18,720 annually—barely more than the poverty level for a family of three and less than the poverty level for a family of four. As a result, a sizeable percentage of waitresses and waiters live in families below the poverty level—and the rates are even higher for black and Hispanic waitresses and waiters.

Overall, the family poverty rate for waitresses and waiters is 14.9%—almost three times the rate for the workforce as a whole. And the rates are even higher for tipped workers as a whole, since their wages are lower than those of waitresses and waiters.

To help fix this, Rep. Donna Edwards (D-MD) has introduced H.R. 2570, the Working for Adequate Gains for Employment in Services (WAGES) Act, which would set the minimum wage for tipped workers at 70% of the standard minimum wage. Tipped workers had their minimum wage linked to the standard minimum until Congress “de-linked” them in 1996, so there’s plenty of precedent for doing things that way, and it would end the absurd situation tipped workers are in today where an increase in the minimum wage doesn’t result in an increase in their minimum wage.

Beyond that, as the New York Times correctly noted in an editorial yesterday, more needs to be done for those workers who are covered by the minimum wage — like ensuring that underpaid jobs provide opportunities for good workers to achieve the American Dream, rather than becoming dead-ends:

President Obama talks a lot about a bright future with high-paying green technology jobs. It is imperative to plan and work for that future. But a concerted effort must also be made to improve the opportunities for workers in the types of low-wage jobs that are going to be most plentiful for years to come.

That means working with unions, professional associations, community colleges and employers to build so-called career ladders so workers can attain the skills they need to advance, say, from a very-low-paid home care aide, to a low-paid nurse’s aide, to a higher-paid licensed vocational nurse. Partnerships between unions and employers in hospitals, casinos and factories have pioneered such skill-building efforts, combining on-the-job training with classroom instruction…

Low-paid jobs are a fact of working life in America. Unlike so many of the nation’s higher-paying jobs, they are not going away. One of the big challenges of our time is to ensure that for some workers, they are a stepping stone to better jobs and that for all workers, they are safe and fairly compensated.

Agreed!