A federal minimum wage increase taking effect today boosts thehourly pay rate by 70 cents, but many people are uncertain whateffect the change will have on the local economy.

The law increases the rate from $5.15 to $5.85 an hour andestablishes additional raises to $6.55 in the summer of 2008 and to$7.25 in the summer of 2009. This year’s increase is the firstsince 1997.

However, David Holland, director of the Brookhaven branch of theMississippi Department of Employment Security, said many of LincolnCounty’s workers are paid on a higher scale than minimum wage. Someof those employees question whether their earnings will alsoincrease or lose value as the economy reacts to the changes.

“I haven’t been told yet if it will affect my pay, but I haven’tasked,” said Melissa Woods, a store manager at Tobacco Mart.

While not directly impacted by the minimum wage hike, theplanned increases would raise the minimum to within range of Woods’current pay level.

She has earned three raises in the past two years to reach hercurrent pay scale, Woods said, and it took her six months on thejob to rise to the new minimum wage. She feels she is losing someground with the pay hike, but accepts the change.

“The minimum wage needed to go up,” she said. “The price ofeverything has gone up. It wouldn’t bother me if they (got a raise)and I didn’t.”

However, Woods added, “I think everyone making under $10 an hourshould get a raise to compensate.”

At some point, she said, when an employee devotes enough yearsto a job, it becomes a career regardless of the pay scale.

Holland said that a ripple effect would occur in time as theeconomy makes adjustments to both higher wages and possibleincreases in the prices of goods and services if employers raiseprices to meet new payroll demands. However, he could not predictwhen employers would react to the changes.

Some may act immediately and increase the wages of all employeeswith each increase in the minimum wage, while others may wait untilafter the increase affects the pay of their employees beforeresponding, he said.

“I would think over a period of time that all wages would haveto be adjusted upwards,” Holland said. “There are a lot of peoplemaking wages in that range and it will have to bump wages up somebecause of the additional (retail) increases.”

Mississippi is one of five states in the U.S., all in the South,that have not passed their own minimum wage laws and fallexclusively under federal mandates, according to Department ofLabor statistics. Three of the four remaining states borderMississippi – Alabama, Louisiana and Tennessee. South Carolina isthe only other state not to pass a minimum wage law.

However, a vast majority of states have minimum wage laws thatset the federal standard or have rates that will be surpassed bythe new law by 2009 unless the state re-evaluates its own law.

Others, like Washington, already have minimums above even the2009 increase. Washington has the highest minimum wage law in theU.S. at $7.98 per hour, according to Department of Laborstatistics.

Holland said he could sympathize with the need for a minimumwage increase in Mississippi.

“There are a lot of minimum wage jobs out there, not just herebut across the state,” he said. “And they’re not all going tostudents and young people.”

Holland said there are some heads of household working twominimum wage jobs or several part-time jobs to make ends meet.

“Everyone has to survive,” he said. “They have to make a wagethat provides them with the basic necessities.”

Brookhaven City Clerk Mike Jinks said that is one reason why thecity will not be affected by the increase.

“We don’t pay minimum wage,” he said. “All of our employeesstart at a minimum of $7 (per hour).”

That starting wage can also be adjusted upwards if the employeebegins with skills vital to the performance of their jobs, such asa commercial driver’s license, said Mayor Bob Massengill.

Jinks said he expects the city will be adjusting its startingwages at some time in the future to account for the higher minimum.However, he could not say when that would occur.

“We’re just getting ready to start on the budget,” he said.”What the board will do is anyone’s guess at this point.”

Massengill agreed. He said employee wages had not been discussedby the board yet, but the mayor expected it would be a topic fordebate in August.

“It’s something the board will definitely want to take intoconsideration,” he said.