On May 25, President Bush signed legislation increasing the federal minimum wage for the first time since 1997. The increase was tacked on to an unrelated "war supplemental" appropriations bill and approved by the U.S. House and Senate by large margins.

Title VIII, Subtitle A, of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act of 2007, is the Fair Minimum Wage Act of 2007, which increases the minimum wage. Title VIII, Subtitle B, is the Small Business and Work Opportunity Tax Act of 2007, an accompanying package of business tax incentives.

The Fair Minimum Wage Act of 2007 increases the federal hourly minimum wage rate to:
• $5.85, effective 60 days after the date of enactment (i.e., July 24, 2007);
• $6.55, effective 12 months after that 60th day (i.e., July 24, 2008); and
• $7.25, effective 24 months after that 60th day (i.e., July 24, 2009).