Time for a raise? President Obama wants to increase the federal minimum wage to $9 an hour.

• Author: Smith, Patricia
• Position: Barack Obama

Catrina Crable, a 10th grader at Martin County High School in Stuart, Florida, works 20 to 25 hours a week as a restaurant hostess, earning $7.79 an hour to pay for gas, car insurance, and her phone.

"Even working so many hours, I don't get paid that much," she says. "It's stressful."

If President Obama has his way, Crable and millions of other minimum wage workers will soon get a raise. Obama wants Congress to raise the federal minimum wage to $9 an hour from $7.25, which would be the first increase since 2009.

"This single step would raise the incomes of millions of working families," Obama said during his State of the Union address in February. "It could mean the difference between groceries or the food bank, rent or eviction, scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets."

But the idea faces stiff opposition. Many companies that hire low-wage workers have opposed raising the minimum wage because it increases their cost of doing business and, they say, makes them less able to hire new workers or give current employees raises.

"Small employers often have to operate under very slim profit margins," says Randy Johnson of the U.S. Chamber of Commerce, which represents businesses. "An increase has to be shouldered by the employer."

Congress enacted the first federal minimum wage--25 cents an hour--in 1938 as part of President Franklin D. Roosevelt's New Deal during the Great Depression. Minimum wage was included in the Fair Labor Standards Act, which also established overtime pay and banned child labor. Roosevelt said that, aside from Social Security, the law was "the most far-sighted program for the benefit of workers ever adopted."

Nineteen states and the District of Columbia have set their minimum wages higher than the federal level (see map). In nine of those states, the minimum wage automatically rises with inflation. Currently, Washington is the only state that sets a minimum wage above $9 an hour, the level proposed by Obama.

Buys Less Today

Advocates of a higher federal minimum say increases haven't kept up with inflation, so today's minimum actually buys less than it used to--25 percent less than its adjusted-for-inflation peak in 1968. Under the president's proposal, the federal minimum would be raised in stages, reaching $9 an hour by the end of 2015. Obama wants to tie the federal minimum to inflation so it rises automatically with the cost of...