House and Senate conferees approved compromise legislation yesterday to raise the hourly minimum wage from $2.30 to $3.35 in four annual steps through 1981, starting with $2.65 next year.
About 4.6 million workers, roughly 5 per cent of the total work force, would have their pay increased in January according to Labor Department estimates.
The conference result was a victory for oganized labor, women's groups and other minimum wage supporters - a substantially more generous bill than the one initially adopted by the House last month.
"Those who are supporting the legislation can claim a major victory," said Jack Carlson, vice president of the U.S. Chamber of Commerce, one of the chief opponents. Labor lobbyists called it a "good bill."
Employer groups had lobbied aggressively to cut back the proposed post-1978 pay levels, to exempt more small businesses from coverage, to fend off a wage rate increase for workers who receive tips, and to provide a "sub-minimum" for teenagers. All this met with minimal success in sharp contrast to these groups' earlier lobbying victories in Congress this year.
Carlson, in effect, conceded defeat on the wage bill. While urging rejection of the conference report, he said there is little livelihood of that.
Both houses are expected to give final approval to the legislation next week, according to its chief Democratic sponsors, Sen. Harrison A. Williams Jr. (N.J.) ans Rep. Philip Burton (Calif.).
President Carter endorsed the legis lation in much the same form as approved by the Senate, and is expected to sign the bill - which proponents say will expeand "economic justice" but opponents say will aggravate both inflation and unemployment.
The only major setback for the administration, labor and other backers of the original bill was decisive rejection by the House of an automatic escalator formula pegging future minimum wage increases to average manufacturing wages. But the Senate approved the specific wage rates that such a formula would have prescribed through 1981, and the conference committee shaved them only slightly.
Under the conference compromise, the minimum wage would be set at $2.65 thorugh 1978, $2.90 through 1979, $3.10 through 1980 and $3.35 thereafter. The House figures were $2.65 in 1978, $2.85 in 1979 and $3.05 in 1980, with no increase in 1981. The Senate figures were $2.65 in 1978, $2.90 in 1979, $3.15 in 1980 and $3.40 for 1981 and thereafter.
The biggest fight in the conference committee came over how far to expand the existing small-business exemption, under which business with $250.000 or less in annual sales do not have to pay workers the minimum wage.
The House proposed raising the threshold next year to $500.000, which would have exempted about 3.8 million workers. The Senate voted to raise the figure in two steps to $325.000 by July 1981. The conference committee, after protracted haggling and threats to disband in disagreement settled on $262.000 by Dec. 31, 1981 - with interim steps of $275.000 next July and $325.000 in July, 1980.
Labor Department officials estimated that about 650.000 workers would lose minimum wage protection by 1981 under this compromise.
On another major point of difference between the House and Senate bills, the conferees agreed to increase the minimum - now half the regular wage floor - that employers must pay workers such as waiters and waitresses who receive a substantial part of their income from tips.
The House voted to keep this so called "tip credit" at 50 per cent, while the Senate scaled in down to 30 per cent by 1981. The conference agreed to reduce it to 46 per cent 1979 and 40 per cent in 1980.
Because of Senate objections that the implications were unclear, conferences also dropped a House proposal to remove all existing minimum wage and overtime exemptions for businesses with $100 million or more in annual gross sales - a provision aimed largely at farm operations owned by big corporations. Burton claimed that it would have benefitted about 7 million workers. The conferees suggested that the issue be submitted to the minimum wage review commission which is proposed in the overall legislation.
Labor and business officials disagreed sharply over the impact of the wage package. AFL-C10 officials said it would raise wages closer to - but not up to - the government's propjected poverty levels for many women, minority group members and people in restaurant, hotel and motel, laundry and other low-wage work. Carlson of the Chamber of Commerce said it would add 27 per cent to the consumer price index and prevent creation of 1.9 million new jobs.