Democratic-led House votes to raise minimum wage

WASHINGTON (Reuters) - A bill to raise the federal minimum wage for the first time in a decade won passage in the U.S. House of Representatives on Wednesday as newly empowered Democrats moved quickly to keep campaign promises.

On a vote of 315-116, the Democratic-led House brushed aside some corporate concerns and approved legislation to increase the minimum wage over two years to $7.25 per hour from $5.15 per hour.

"Passing this legislation today ... is simply a matter of doing what's right, what's just and what's fair," said House Majority Leader Steny Hoyer, a Maryland Democrat.

With the gap between rich and poor widening, Democrats promised a minimum wage increase as a part of their campaign that saw them win control the U.S. Congress in last year's elections from President George W. Bush's Republicans.

"What a difference an election makes," said Rep. George Miller, a California Democrat. He ripped Republicans for stopping earlier efforts to raise the minimum wage.

The bill now goes to the Senate where some Democratic leaders say they may add a tax break to it for small business to offset the cost and avert a possible Republican roadblock.

House Democrats refused to include such relief in their bill. They noted there had been plenty of tax cuts for business in recent years, and said it is long past time to help dishwashers, fast-food cooks and millions of America's other lowest-paid workers.

Rep. Zach Wamp of Tennessee voiced reservations about the bill, but like scores of other Republicans ended up backing it.

"I'm going to vote to raise the minimum wage because you can't defend not raising it for nine years if we are going to have a minimum wage," Wamp said.

Some Republican lawmakers cited studies that show an increase in the minimum wage would drive more than 1 million people out of work.

"Any minimum wage increase will significantly affect the bottom line," said Bruce Josten of the U.S. Chamber of Commerce, one of the nation's leading business groups.

"This bill completely ignores that fact, and as a result small businesses may be forced to eliminate jobs, reduce hours, and cut employee benefits," Josten said.

But Wal-Mart Stores Inc., the world's biggest retailer, reiterated its support for an increase, saying it would help working families.

Democrats pointed to studies that show a modest increase would cause no significant job loss. They have also noted a survey that found most small businesses believe it would not hurt them. Most already pay above the minimum wage.

Passage of the bill came a day after House Democrats began consideration of their "first-100 hour" agenda by approving a measure to bolster's America's security.

They plan votes in coming days on the four other bills on this agenda. They include ones to overturn Bush's restrictions on embryonic stem cell research, lower prescription drug prices, cut the interest rate on student loans and end some subsidies for big oil companies.

At $5.15 per hour, a person working 40 hours per week makes $10,712 per year, about $5,000 below the poverty line for a family of three.

According to federal statistics, in 2005, the latest year figures are available, 479,000 people received the minimum wage. But millions of others were paid just a dollar or two more, with many of them also living in poverty.

(Additional reporting by Andy Sullivan and Donna Smith)