SPRINGFIELD - Decatur gas station owner John Phillips said he was glad to find out the state minimum wage would go up by 25 cents in July.

But his delight came mostly because he thought it was going up $1.

"I'm relieved it's a quarter," Phillips said.

On July 1, the minimum wage in Illinois will go up to $7.75. It's now $7.50 after rising from $6.50 at this time last year.

Gov. Rod Blagojevich and lawmakers approved the increases in 2006. The state says that this year's increase will mean $520 more a year for a full-time, minimum-wage worker.

"This makes Illinois a national leader in raising wages for low-income workers," said Anjali Julka, spokeswoman for the state Department of Labor.

In fact, the new Illinois minimum wage will be more than a dollar more than the new federal minimum wage of $6.55, which will take effect at the end of July. And the state mark also is higher than any neighboring state.

The July increase gives minimum-wage workers a little more money to pay for rising gasoline prices, utilitiy rates and food costs.

But many store owners who employ minimum-wage workers could have to further raise prices on all of their products to pay for the higher salaries.

Employers have had time to plan for increases in the minimum wage because the state outlined 25-cent increases every year through 2010, when the wage will hit $8.25.

But other factors for a business can be unpredictable, said Illinois Retail Merchants Association spokesman Peter Gill.

"You can't plan for the economy," Gill said.

For Phillips, he said the increased wage won't affect the price of gas at his station, but the cost other fare such as candy bars and soda will likely rise, if only by pennies here and there.

He said passing the increased costs onto paying customers is a better option than having to let any of his employees go.

"That's not a pleasant thing to have to do," he said.