House OKs wage increase

Bill to boost federal minimum to $7.25 over 2 years moves to Senate

January 11, 2007|By Richard Simon | Richard Simon,Los ANgeles Times

WASHINGTON -- The House's Democratic majority, exercising its new political power, approved yesterday the first increase in the federal minimum wage in a decade - from $5.15 to $7.25 an hour over two years.

The measure heads to the Senate, where it is likely to be coupled with tax breaks for small businesses to win Republican votes in the narrowly divided chamber and secure President Bush's signature.

The minimum wage has been unchanged since 1997, the longest period without a raise since the first minimum wage was enacted in 1938.

Maryland - where the minimum wage is $6.15 an hour - is among 28 states with minimum wages that already exceed the existing federal rate.

An increase in the minimum wage was among the initiatives that House Democrats pledged to pass during their first 100 hours in power.

It was approved 315-116, with 82 Republicans joining 233 Democrats in voting for it. All the no votes were cast by Republicans.

The Maryland delegation's two Republicans split their vote. Rep. Wayne T. Gilchrest joined the state's six Democrats in voting yes; Rep. Roscoe G. Bartlett voted no.

"What a difference an election makes," said Rep. George Miller, a California Democrat who leads the House Education and Labor Committee.

Once the minimum wage is increased, he told his colleagues during the debate, "you dramatically change life for millions of people."

Majority Leader Steny H. Hoyer of Maryland said that workers relying on $5.15 an hour are "essentially living in poverty."

The White House said in a statement that an increase in the minimum wage should be tied to tax and regulatory relief "to help small businesses stay competitive and to help keep the economy growing."

Under the measure approved by the House and introduced in the Senate, the wage would climb to $5.85 60 days after the legislation is enacted, to $6.55 one year later and to $7.25 after another year.

The minimum wage, first enacted at the rate of 25 cents an hour as part of President Franklin D. Roosevelt's New Deal plan to pull the nation out of the Great Depression, has long been a rallying point for Democrats.

Rep. Jeb Hensarling, a Texas Republican, contended that employers would cut jobs and benefits to pay for a minimum wage increase.

"The truth is that mandated minimum wage increases hurt small businesses, thus impeding job creation and ultimately hurting the people it is designed to help," he said.

Senate debate on a minimum wage increase is expected to begin as early as next week.

Sen. Edward M. Kennedy, a Massachusetts Democrat who leads the committee that handles labor issues, has championed the minimum-wage increase. Yesterday, he called the House vote a "major victory" for 13 million minimum-wage workers.

"But the fight is not over yet," he said. "We will need support from both parties to pass this important bill and send it to the president."

The restaurant industry and other employers were already at work lobbying the Senate for tax breaks for small businesses.

Bush has said he supports a wage boost paired with "targeted tax and regulatory relief" to help businesses - which would have to pay for the higher labor costs - stay competitive. The Labor Department says 479,000 workers paid by the hour earned exactly $5.15 in 2005, the most recent estimate available.

If the federal wage does rise in 26 months to $7.25 an hour, about 5.6 million people - 4 percent of the work force - who make less than that would be directly affected, according to the Economic Policy Institute, a liberal-leaning group. The group estimates that an additional 7.4 million workers would benefit indirectly as raising the national wage floor would ripple through the work force.

Recent attempts to boost the federal minimum wage had failed when Republicans controlled the Congress. But prospects changed after the Nov. 7 midterm elections put Democrats in charge in both the House and Senate.

Sen. Max Baucus, a Montana Democrat who leads the Senate Finance Committee, predicted a wage increase would be accompanied by tax breaks for small business in the Senate bill.

"Small-business tax packages have traveled with minimum-wage increases before," he said. "The Senate will probably vote to attach such a package to this year's minimum-wage increase as well."

Richard Simon writes for the Los Angeles Times. The Associated Press contributed to this article.

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