The House Education and Labor Committee yesterday approved, 29 to 7, White House-backed legislation to raise the hourly minimum wage from $2.30 to $2.65 next year, and then have it rise automatically each year in the future.
The committee approved the legislation after voting to expand coverage for tipped workers and rejecting a lower wage floor for teenagers.
Both issues are expected to be revived when the bill comes up for a vote next Wednesday on the House floor, where support for a youth differential is reported to be growing because of concern over high unemployment among young people.
Aside from charges in the so-called tip credit, which the administration wanted to retain, the legislation closely parallels the compromise worked out with some difficulty earlier this month between President Carter and organized labor.
The legislation would raise the minimum to $2.65 an hour Jan. 1, in effect giving a pay increase to 6 million to 7 million American workers. The minimum would automaticallly rise to 53 per cent of the average industrial wage (an estimated $3.15) Jan. 1, 1980. It would remain at 53 per cent there-after.
The legislation breaks new ground in that, ofr the first time, the wage floor would rise annually, pegged to average production wages. Now it can be changed only by statute, which was last done in 1974.
Carter originally proposed raising the minimum to $2.50, triggering an angry denunciation from AFL-CLO President George Meany, who had advocated a $3 minimum. The wage accord, coupled with administration advocacy of labor law reform, has considerably warmed previously chilly relations between the White House and the AFL-CIO.
The committee-approved legislation goes beyond the Carter-labor compromise principally in the area of tipped workers, who may now be paid half the minimum, $1.15 an hour, if they make at least $20 a month in tips.
An earlier subcommittee proposal to phase the tip credit out by 1983 was dropped yesterday in favor of scaling it down to $1 by 1981, meaning that waiters, waitresses and other tipped workers could be paid $1 less than the minimum wage. Hotel and restaurant workers would also be made eligible for overtime after 40 hours a week, instead of the current 46 hours, by 1979.
The legislation also goes beyond the Carter compromise in assuring full minimum wage and overtime coverage to employees of firms that have annual gross earnings of $100 million annor more. Rep. Phillip Burton (D-Calif.) said the provision, approved 31 to 3, is aimed largely at oil companies with large agricultural holdings.
Burton called it an effort to "put an end to unfair competition" in agriculture, while Rep. John N. Erienborn (R-111.) called it an "attack on the corporate way of doing business."
Proposals for a youth differential came from Democrats and Republicans, indicating that - despite commitee rejection of the proposals - some formula for lower pay for teenagers may have a chance on the House floor and in the Senate.
Erienborn proposed that employers pay 75 per cent of the minimum wage to workers under age 18 and 75 per of the minimum for the first six months of employment for persons aged 18 to 21. The proposal was defeated, 15 to 21.
Rep. Robert J. Cornell (D-Wis) made a counterproposal to permit rmployers to pay 85 per cent of the minimum during a teenager's first six months on a job.
Although the Cornell proposal was rejected by a 2-to-1 ratio after Burton pleaded with the committee to defer the issue until the bill comes to the House floor, several committee sources said the showing of bipartisan support for a youth differential was significant. "It opens the way to a compromise," saidone.