The House last night passed, 309 to 96, a bill to raise the minimum wage from $2.30 to $2.65 an hour next year, but only after organized labor was dealt three major defeats and had to be rescued from a fourth by a tie-breaking vote by Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.)
In a taut finale to a day of gloom for the AFL-CIO and its allies, the House voted 211 to 210 - after some last-minute vote switches and O'Neill's tie-breaker - to defeat a proposal to create a lower wage floor for teenagers.
This vote followed a stunning set back for the unions, the White House and the Democratic leadership when the House rejected, 223 to 193, a provision to substitute automatic annual increases in the minimum wage for the present system of congressional wage-setting every few years.
In another loss for labor and its allies the House also rejected, 264 to 161, an Education and Labor Committee proposal to increase the minimum wage for workers who receive tips. These workers, such as waiters and waitresses, are presently guaranteed only half the wage floor that other workers get, or $1.15 an hour at the present rate.
The House also enlarged, over labor objections, a provision exempting small businesses from the minimum wage requirement. Currently, businesses with sales under $250,000 are exempt; the House raised this to $500,000 taking 3.8 million workers out from under the law.
"On balance, we don't think it's good," said Albert J. Zack, spokesman for the AFL-CIO, which was stung earlier this year by defeat of a construction site picketing bill.
The federation now faces a tougher-than-expected fight over its top-priority goal of overhauling the country's labor laws to make it easier for unions to organize and win contracts.
AFL-CIO President George Meany issued a statement pledging a fight to restore the House cuts when the Senate takes up minimum wage legislation later this month.
As approved by the House, the hourly minimum wage would rise to $2.65 next January, $2.85 in 1979 and $3.05 in 1980, providing pay increases for an estimated 4.6 million workers in the first year. As in the past, congressional action would be required for any increases after 1980.
The AFL-CIO initially sought a $3 minimum wage with automatic increases for the future. But, under a compromise worked out between the White House and the labor federation, it was agreed to start with $2.65 next year and then introduce an indexing formula pegging the wage floor to 52 per cent of average manufacturing wages for 1979 and 53 per cent thereafter. This would have produced a projected minimum wage of $2.89 in 1979, $3.15 in 1980 and $3.37 in 1981.
Defeat of this scheme, which was strongly backed by labor and vigorously opposed by business groups, was the surprise of the day. Labor lobbyists feared losing battles for the "subminimum" youth wage and the tipping provision but figured they had the votes to win the automatic escalator.
The defection of 97 Democrats, along with nearly solid Republican opposition, was critical in defeating the escalator, which its foes said would contribute to inflation and amount to a congressional abdication of responsibility.
A liberal Democrat who voted against the escalator said his colleagues are complaining that labor is "asking for too much all at once" and are finding that they can defy labor's wishes with apparent impunity. O'Neill, who had blamed the picketing bill's loss last March on sloppy lobbying by unions, said labor lobbied effectively this time and added, "The members are simply voting the will of the people back home."
After the initial defeat on the escalator, Rep. Phillip Burton (D-Calif.), the bill's floor manager, tried to revive the indexing principle by providing that it be tried until 1984, but this effort lost by an even larger margin.
The youth "subminimum" wage, which drew the backing of a number of liberal-to-moderate Democrats concerned about youth unemployment, would have permitted employers to pay workers under age 19.85 per cent of the minimum wage for their first six months of employment.
Under the tipping provision, the so-called "tip credit" for employers would have been reduced from 50 per cent of the minimum wage to a flat $1 less than the wage floor.
The House also voted to exempt fulltime babysitters from the minimum wage and rejected a proposal a committee proposal to end the current exemption for workers employed by concessions at National Parks and Forests.