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The federal minimum wage rose from $5.15 to $5.85 on July 24, 2007, two months after President Bush signed the Iraq war bill into law. The federal minimum wage rises to $6.55 a year later, and to $7.25 an hour a year after that; the three $0.70 an hour increases are the first since 1997.

An estimated 5.6 million US workers, four percent of the labor force, earns less than $7.25 an hour. Over half of the states have minimum wages higher than the federal minimum: http://www.dol.gov/esa/minwage/america.htm

The US has an estimated one million home health care aides. They are considered analogous to baby sitters, in "domestic service employment," and not covered by minimum wage laws. Some states, including California, Washington and Wisconsin, require that home health care aides receive at least the minimum wage, but California does not require premium pay for overtime.

Unemployment Insurance. A third of US jobless workers receive unemployment insurance benefits. The unemployment rate has been trending downward, but the average duration of unemployment is rising, suggesting that when workers lose their jobs, the job loss is permanent rather than cyclical.

The UI system, created in 1935, was designed for workers employed by manufacturing firms who lost their jobs during cyclical downturns; it is not as well suited to deal with workers who move between employers and in and out of the labor force. It is a federal-state system, meaning that the federal government establishes minimum coverage and eligibility criteria and finances the overall administration of the program with a small tax (FUTA of 0.8 percent of the first $7,000 in earnings), and states determine minimum and maximum UI benefits and finance them.

UI benefits range from $200 to $500 a week for up to 26 weeks. Typically a third of UI benefit recipients do not find jobs before their benefits are exhausted, and benefits can be extended by 13 weeks when unemployment is high. Benefits averaged $262 in 2004, which was between 35 and 50 percent of average weekly earnings in most states.

Mobility. Economic mobility in the US may be diminishing. In 2004, the median income for a man in his 30s, a good predictor of his lifetime earnings, was $35,010, which is 12 percent less than for men in their 30s in 1974 (adjusted for inflation). In 1994, by contrast, the median income for men in their 30s was $32,901, above 1974 levels.

Between 1947 and 1974, productivity (output per hour) and median family income, adjusted for inflation, both roughly doubled. Between 1974 and 2000, productivity rose 56 percent while income rose 29 percent. Between 2000 and 2005, productivity rose 16 percent while median income fell two percent.

The Congressional Budget Office released a study in April 2007 that, using Social Security Administration records, concluded there has been no increase in the volatility of individual incomes has over the past three decades. If income volatility is relatively stable, income inequality has increased.

However, another study focusing on families found a sharp increase in the volatility of family incomes. The probability that a family will experience a decline in annual income of 50 percent or more, compared with their average income in the previous three years, rose to 1.8 percent in 1995 from 0.6 percent in 1973. Such a drop can occur if a factory closes or an employer restructures and affected workers cannot find jobs that pay comparable wages.

There are three major sources of higher labor productivity: more and better capital for workers, sometimes called "capital deepening;" increased education and skill embodied in workers, and total factor productivity (TFP), everything not otherwise explained.

Productivity growth averaged three percent a year from 1995 to 2004, but then fell to half that rate. However, comparisons with the spread of electric motors and other kinds of innovations that spread widely throughout the economy suggest that the benefits of computers, which contributed to rapid productivity growth in the past decade, may continue to deliver productivity gains as they spread into more areas.