The minimum wage in the US is to rise by $2.10 per hour, to $7.25 from its current level of $5.15, the first time it has increased in a decade.
Economic migrants are some of the most vulnerable to low wages
The US Congress voted in favour of the rise, which was attached to a bill funding the Iraq war.
Democrats promised to boost the minimum wage when they won control of Congress in elections in 2006.
The increase will be phased in over a two-year period and will accompanied by tax breaks for small businesses.
The White House negotiated a $4.84bn tax break to help employers pay for the increase in wages.
Minimum wage workers are typically young, single and female and are often black or Hispanic.
Previous proposals to boost the minimum wage have regularly been scuppered by arguments between Democrats and Republicans.
Earlier this year the proposal was approved by both houses of Congress but became one casualty of President George W Bush's veto of a previous funding bill which included Democratic plans to impose a timetable for the withdrawal of troops from Iraq.
The chairman of the Ways and Means committee in the House of Representative, Democrat Charles Rangel, said the new measure would benefit employees and employers.
"This package will help millions of American workers better cope with the rising cost of living while helping our businesses expand and hire new workers to keep our local economies vibrant."