WASHINGTON --About 2 million Americans, including 11,000 Utahns, get a raise Thursday as the federal minimum wage rises 70 cents. The bad news: Higher gas and food prices are swallowing it up, and some small businesses will pass the cost of the wage hike to consumers.

Local economists say the minimum wage hike isn't likely to have a dramatic economic impact in Utah because many businesses are already paying more than $6.55 an hour.

"There's been strong wage growth throughout the state in the last few years, and even with the economy slowing, a lot of people are still making above minimum wage," said Michael Hanni, a labor economist with the state Department of Workforce Services. The average annual wage in Utah gained 5.5 percent in the 2006-2007 calendar year, compared with a 5.4 percent rise in the previous year-ago period.

Of a total working population of more than 1.25 million in Utah, about 11,000 workers made minimum wage of $5.85 or less in 2007, compared with 17,000 people who made minimum wages of $5.15 or less in 2006, according to the Bureau of Labor Statistics. Most of Utah's minimum wage workers are in the leisure, hospitality and food services industries.

"While job growth is slower, the increase in minimum wages isn't likely to accelerate that," Hanni said.

But a study from Employment Policies Institute found teens and adults without a high-school diploma are among the most vulnerable as many small businesses are forced to either cut hours or terminate them to cope with higher labor costs in an economic downturn.

"Small business owners are not only facing higher commodity costs and gas costs, but also higher labor costs now. Not only are the minimum wage workers getting a raise, the employers may have to raise wages of the higher-paid workers as well," said Tim Miller, a spokesman with the Institute. The Washington D.C. nonprofit group specializes in the study of public policy issues surrounding entry-level employment.

"For every 10 percent increase in minimum wage, employment falls between 6 percent and 14 percent for employees aged 16 years to 29 years without a high school diploma," Miller said, citing the study.

Workers like Walter Jasper, who earns minimum wage at a car wash in Nashville, Tenn., are happy to take the raise, but will still struggle with the higher gas and food prices hammering Americans.

"It will help out a little," said Jasper, who with his fiancee supports a family of seven, and who earns the minimum plus commissions when customers order premium car-wash services.

The bus fare he pays each day to get to work already went up to $4.80 this spring from $4. "I'd like to be on a job where I can at least get a car," he said.

Last week, the Labor Department reported the fastest inflation since 1991 -- 5 percent for June compared with a year earlier. Energy costs soared nearly 25 percent. The price of food rose more than 5 percent.

So the minimum wage hike is "a drop in the bucket compared to the increases in costs, declining labor market, and declining household wealth that consumers have experienced in the past year," Lehman Brothers economist Zach Pandl said.

The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.

Twenty-three states and the District of Columbia have laws making the minimum wage higher than the new federal requirement, a group covering 60 percent of U.S. workers, according to the Economic Policy Institute, a think tank.

"You get desperate, because you can't really pay for everything," said Gladys Lopez, 51, a garment worker from Adjuntas, Puerto Rico, who makes military uniforms and has earned the federal minimum for 18 years.

She says she would need to make at least $50 more a week to pay all her bills and take care of her 84-year-old mother, whom she supports.

When the minimum rises again next year, catching up with more states, more than 5 million workers will get a raise, said Lisa Lynch, dean of the Heller School for Social Policy and Management at Brandeis University.

Some small businesses are already making plans to raise prices to offset the higher wages they have to pay their workers.

David Heath, owner of Tiki Tan in College Station, Texas, said the increase will force him to raise prices for his monthly tanning services by about 12 percent. Tiki Tan had been paying its employees $6 per hour.

"There just isn't any room for profit, and so this is why prices will have to go up," he said, citing the wage increase and higher fuel costs. "I have to recoup those costs."

The increase in the minimum wage could push food prices even higher by raising the pay for agricultural workers, said Brian Bethune, chief U.S. economist at consulting firm Global Insight.

But he said he did not expect the change to have a major impact on the economy because recent increases in productivity, which enables companies to produce more with fewer workers, are keeping labor costs in check.

That makes it unlikely the minimum wage increase will trigger a "wage-price spiral," in which workers facing higher costs demand more pay, which in turn causes companies to raise prices higher, sending inflation coursing through the economy.

And most businesses, even restaurants and other service sector companies, already pay above the minimum wage anyway. Dan Whitaker, general manager at Anis Bistro in Atlanta, a casual French restaurant, said employees earn at least $8 an hour.

"You can't get a dishwasher for minimum wage," he said.

• Grace Leong, business editor with the Daily Herald and AP Business Writers Ellen Simon and Anne D'Innocenzio in New York contributed to this report.