House Passes Increase in Minimum Wage to $7.25
Thursday, January 11, 2007
The House yesterday overwhelmingly approved the first increase in the federal minimum wage in nearly a decade, boosting the wages of the lowest-paid American workers from $5.15 to $7.25 an hour over the next two years.
The 315 to 116 vote could begin the process of ending Congress's longest stretch without a minimum-wage increase since the mandatory minimum was created in 1938. In the past decade, inflation has depleted the value of the minimum wage to the lowest level in more than 50 years.
Senate Democratic leaders promise to press for a vote on their own minimum-wage legislation this month. Unlike the House-passed bill, the Senate's would include small-business tax cuts that Democrats believe are necessary to placate Republicans and the business community and win the 60 votes necessary to break a possible filibuster.
"On Monday, we commemorate the life of a great American, Dr. Martin Luther King Jr. And Dr. King once said: 'Equality means dignity. And dignity demands a job and a paycheck that lasts through the week,' " said House Majority Leader Steny H. Hoyer (D-Md.). "Today, we heed those words."
The minimum-wage vote followed House action on Tuesday approving legislation to implement many of the remaining anti-terrorism recommendations of the Sept. 11 commission. The House launched its legislative blitz last week by tightening rules on lobbying and imposing new controls on deficit spending. In all four tallies, Republicans who held in lock step during their 12 years as the majority party went over in droves to the Democratic side.
Democrats used the minimum-wage issue effectively during last year's midterm campaign, vowing to approve an increase if they won control of the Congress.
Republican leaders, backed by small-business lobbyists and restaurant groups, argued fiercely that raising the minimum wage would cripple the economy and must be accompanied by significant tax cuts for small businesses to lessen the effect on them. Rep. John Kline (R-Minn.) predicted that a wage increase "will leave recent economic growth dead in its tracks."
But with Democrats ascendant, such arguments did not go far -- especially now, when a tight labor market has boosted incomes and rendered the minimum wage almost irrelevant in many states. Eighty-two Republicans joined 233 Democrats to approve the increase. More surprisingly, 54 Republicans abandoned their leadership and voted with the Democrats on a procedural motion that would have forced House leaders to add business tax breaks to the bill.
Under the Democratic measure, the minimum wage would jump to $5.85 within 60 days of enactment. One year later, the wage would rise to $6.55; it would reach $7.25 a year after that. The bill for the first time would also apply the federal minimum wage to the Northern Mariana Islands, a U.S. protectorate that was protected from federal labor laws for years because of the efforts of now-imprisoned lobbyist Jack Abramoff and his Republican allies in Congress.
Democrats estimate that a minimum-wage increase will lift the income of 13 million workers -- 5.6 million earning the current minimum wage and 7.4 million just above that level.
"Today we finally release them from being frozen in time, stuck at that wage level when their gas prices are higher, their education prices are higher, when their medical costs are higher," said George Miller (D-Calif.), the House Education and Labor Committee chairman and the bill's author.
But hurdles remain. When the Senate last year brought a simple minimum-wage increase to a vote, it fell well short of passage. Senate Finance Committee Chairman Max Baucus (D-Mont.) plans to complete a package of small-business tax breaks by next week that would cost the Treasury up to $10 billion over the next 10 years. Those measures would mainly extend existing tax breaks, such as a tax deduction for the hiring of welfare recipients, generous tax deductions for business investments and breaks for property leases.
Some Senate Republicans are pushing for tax measures worth twice that much, and they could push a controversial measure to allow small businesses to pool together to buy health insurance. The bill, long sought by Republicans and small-business lobbyists, is strongly opposed by Democrats who say it would allow such "pools" to ignore state health insurance mandates.
John J. Sweeney, president of the AFL-CIO, said that an increase in pay for the nation's lowest-paid workers "should not have to depend on even more payoffs to business."
The White House yesterday released a statement opposing the House's minimum-wage increase and praising the Senate for considering small-business tax breaks. But the statement of administration policy did express the Bush administration's support for a $2.10 increase in the minimum wage and pointedly stopped short of threatening a veto.