The Senate voted to increase the minimum wage by over 50 per cent over the next four years last night after rejecting a last-ditch effort to let employers pay teenagers less than the minimum wage floor.
Senate passage of the measure by a 63-to-24 vote represented a major gain for organized labor over wage legislation passed last month by the House.
It was the second victory in as many days for the AFL-CIO and other unions whose labor law revision package was approved by the House Thursday.
The Senate bill would raise the hourly minimum wage from $2.30 to $2.65 next year and in steps to $3.40 in 1981.
The bill now goes to a conference with the House, which has passed its own version of minimum wage increase. The House version is somewhat less generous.
Labor's biggest single win yesterday came when the Senate voted to soften a provision of the House-passed minimum wage bill that would have exempted 3.8 million workers, including roughly one-quarter of all minimum wage recipients, from the law's protection.
The House bill would have done this by exempting business with less than $500,000 in annual sales. The exemption now is $250,000 in sales.
The Senate rejected this approach and in a proposal by Sen. Dale Bumpers (D-Ark) that was acceptable to the unions, voted to increase the threshhold to $275,000 next year and $325,000 in 1980. This would have the effect of exempting 400,000 workers only 80,000 of whom now earn the minimum wage.
On final passage, the Marylanders voted for the bill and the Virginias voted against it.
In a series of votes, the closest of which was 49 to 44, the Senate rejected four proposed variations of a youth "subminimum" which proponents said would help ease tennage unemployment but opponents argued would aggravate adult joblessness.
The House earlier defeated a youth differential by a 1-vote margin before approving legislation raising the hourly wage minimum from $2.30 to $2.65 next year $2.85 in 1979 and $3.05 in 1980.
In initial action on the wage bill Thursday night, the Senate went beyond the dollars and cents figures set by the House in voting for $2.65 next year, $2.90 in 1979, $3.15 in 1980 and $3.40 in 1981.
This represented a substantial recovery for organized labor, which as the measure's chief backer, failed to win House approval for an automatic escalator formula pegging the wage floor to average manufacturing wages after next year. What the Senate did was to approve the figures that the formula would have provided based on projected wage rates, through 1981.
The Senate also voted to reduce from 50 per cent to 30 per cent the so called "tip credit" that employers can discount against wages paid to workers who receive tips - a step the House refused to take.
When the Senate completes action on the whole bill, it will go to conference to resolve differences, including the wage rates. Labor lobbyists, who have been winning most of their battles in recent days, said there is a strong chance that the $3.40 level will prevail in conference, producing a 45 per cent increase over the present $2.20 wage by 1981 for an estimated 4.7 million workers.
The AFL-CIO and other unions historically have opposed a youth differential as a device to undermine wages for adult workers, and was joined in opposing it this year by the Carter administration.
But business made it one of their top priority goals in opposing the wage bill, sensing that concern over youth unemployment and inflation would make a breakthrough possible on what they call the "youth opportunity" wage.
On the closest youth differential vote, the Senate rejected a proposal from Sen. Pete V. Domenici (R-N.M.) to permit employers to pay workers 19 and younger 85 per cent of the wage minimum for up to six months with penalities for firing workers at the end of the six-month period and replacing them with other teenagers.
Domenici and other advocates of the subminimum contended that it would create more jobs for teenagers help small business and benefit both rural and inner-city areas. Sen. Harrison A. Williams Jr. (D-N.J.), the bill's cosponsor, said any boon to teenagers would be at the expense of adults, including Vietnam war veterans, whose unemployment rate, Williams said, excedes that of teenagers.
Defeated overwhelmingly 77 to 14 was a proposal from Sen. William L. Scott (R-Va.) to allow persons over 68 to be hired at 75 per cent of the minimum wage, which Scott said, would help them lead a "happy creative life" at a time when they can't compete for jobs equally with younger workers.
The Washington area delegation split on the youth question with the Virginia senators supporting a subminimum and the Maryland senators voting against it.