San Francisco is preparing to make history by raising the minimum wage above $10.
According to reports, the raise to $10.24 is set to go into effect on Jan. 1, 2012. Currently the minimum wage, set by the Department of Labor, is $7.25. It has been at that rate since 2009.
San Francisco passed a proposition in 2003 stating that pay rates must go up every year. While many people are pleased with the raise, some small businesses are being hit hard by being required to pay employees more.
A family of four living in San Francisco will still fall below the poverty line, according to the U.S. Census Bureau. In 2011, the poverty line was set at $22,350. People in San Francisco making the new minimum wage will still only bring home $21,000.
In 2009, the country’s poverty rate was the highest it had been in 15 years, according to the Census Bureau. Forty-four million people fell in the poverty bracket.
Congress is currently debating whether to pass the tax cuts signed into law in 2010. It remains to be seen if they will reach a compromise before the cuts expire at the end of the month. Regardless, the new pay will go into effect in San Francisco.
There is no word on whether the pay raise will spur other states to raise their minimum wages. By federal law, they are not required to unless instructed by the government.