By JEANNINE AVERSA, AP Economics Writer
1 hour, 21 minutes ago



WASHINGTON - The Democratic-controlled House voted Wednesday to increase the federal minimum wage to $7.25 an hour, bringing America's lowest-paid workers a crucial step closer to their first raise in a decade.

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The vote was 315-116, with more than 80 Republicans joining Democrats to pass it.

"You should not be relegated to poverty if you work hard and play by the rules," said House Majority Leader Steny Hoyer (news, bio, voting record), D-Md.

The bill was the second measure passed since Democrats took control of the House, ending more than a decade of Republican rule.

The measure, which now goes to the Senate, would raise the federal wage floor by $2.10 from its current $5.15 an hour in three steps over 26 months.

The Senate is expected to move quickly — perhaps in the next few weeks — on a similar bill. Business groups and some Republican lawmakers, however, hope they will be able to get some business-friendly provisions into the Senate package.

The last increase was in 1997, when President Clinton successfully prodded the GOP-controlled Congress to enact the increase. Republicans declined to approve another raise for the six years in which they held majorities in the House and Senate and President Bush was in the White House.

Organized labor and other supporters pitched the bill as badly needed assistance for the working poor.

Business groups and other critics said it could lead to higher prices for goods and services, force small companies to pink-slip existing workers or hire fewer new ones, and crimp profits.

The White House issued a statement saying it opposed the bill because it "fails to provide relief to small businesses."

Senate Democratic leaders have already signaled they will accept changes designed to shield small businesses from adverse consequences of higher labor costs.

"This bill increases costs for mom-and-pop businesses," said Steve Chabot (news, bio, voting record), R-Ohio, contending the legislation doesn't do anything to help offset that burden.

Many businesses want the pot sweetened, perhaps by faster depreciation or other tax breaks or letting small businesses band together to buy health insurance for their workers.

"In America we can either have maximum opportunity or we can have minimum wages. We cannot have both," said Rep. Jeb Hensarling (news, bio, voting record), R-Texas.

The bill would raise the wage floor in three steps. It would go to $5.85 an hour 60 days after signed into law by the president, to $6.55 a year later and to $7.25 a year after that.

"For 10 years the lowest-paid Americans have been frozen out. They have been working at a federal poverty wage, not a federal minimum wage," said Rep. George Miller (news, bio, voting record), D-Calif., author of the legislation.

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.

The federal minimum wage is like a national wage floor, though some people can be paid less under certain circumstances. States can set minimum wages above the federal level; more than two dozen states plus the District of Columbia do.

People who are paid the minimum wage tend to be young — under age 25 — never married, more likely to be women, minorities and part-timers, according to a recent analysis of 2005 data by the Labor Department.

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 floor would ripple through the work force.

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

How is that, by a higher cost of living and fewer jobs for low-wage workers? Three decades, and what results do we have to show for our war on poverty?

Great, more inflation.

I don't think it'll cause much inflation, but it will certainly create another barrier for people trying to move up. This one will get in the way of those who are trying to go from unemployed to minimum wage.

i think it is funny how corporate america has some of you brainwashed thinking a raise in the federal minimum wage for the first time in a decade is a bad thing



the Democrats have already officially done more for the american PEOPLE in the first 4 days then the republicans have done in the last 6 years

Nope, the Republicans did absolutely nothing for the American people. Well, there's the keeping us safe from another terrorist attack thing. Also the robust economy that could have tanked after 9/11. Not to mention tax cuts. And low unemployment. Nope, not a thing.

On topic, a big to finally raising the minimum wage. The fact that it had not been raised in so many years was a disgrace.

Funny you say that, because the large corporations actually favor a minimum wage increase. Helps limit competition.

The only person I know that currently works for minumum wage is my 16 year old brother at the pizza place down the road. I think it's a good thing that they raised it, but I think the spectrum of people that it accually helps may be a bit overblown. Mcdonalds even pays more than minimum wage.

I agree a lot with what you've said here. I posted a while back in the main minimum wage thread that the floor had been basically rendered meaningless in Idaho:

http://forums.theskyiscrape.com/vie ... 48#1314848

didn't search back far enough for the main minimum wage thread.. I'd say merge em

Meh, I think this deserves its own thread. No worries.

Minimum wage just screws the rest of us. Working for the "state", everyone else got the wage increase. Did I see my wage go up?! Why hell no. Fucking government bullshit.

My2Hands...

There should be NO minimum wage. Period.

Is there a minimum wage set for doctors? Is there a minimum wage set for lawyers? Of course not. That's because they make what they earn. And people that flip burgers should be no different.

This will result in inflation.
This will result in more unemployment.
This will hurt the poor more than anybody else.
This makes my job, and your job, and anybody's job LESS valuable.

Think about the guy making 8$ an hour. He was well ahead of the least skilled in America. And now, without merit, teenagers that drop fries into a vat of hot oil are making nearly as much as he is.

I think the minimum wage is self-defined, and so does not cover high profile jobs, which are far above the minimum wage.

However, as a libertarian I'll have to agree with this. The most I can say as devil's advocate is that this is at least a temporary fix, and that there are more significant factors than minimum wage which drive inflation.

As an aside, I once had a friend who, before becoming a manager, was an assistant manager at a Blockbuster. Since he was salaried, they did him up pretty bad, making him work 55-60 hours a week. Since no overtime was paid, he calculated that his per-hour earnings were a hair short of minimum wage.

Aside 2: Restaurant waitstaff are supposed to be earning half of minimum wage for hourly pay, but were not upped during the last hike. They still earn $2.13 (half of the old $4.25 wage) per hour. In some cases, honestly reporting actual earnings would push the entire check to taxes, and leave the server with an additional tax bill. The result is rampant underreporting of earned cash tips.

Of course there's a minimum wage for doctors and lawyers. It's currently 5.15 an hour. What the hell is so difficult to understand about this?

That the vote was so hugely in favor of this is really telling about the political ship Dennis Hastert was running for the last many years.

http://www.dol.gov/esa/minwage/america.htm

Here's a map of the state minimum wage laws. Yes, the states either with no law or the same as the federal law are the backwards, less economically proficient ones. hmm.

Does the hourly wage apply to workers earning salary? It might if they calculate pay based on the assumption that they work 40 hours, I dunno, but my old roomie really got the stick when he was a manager at BBV back in '98 and earning $1200 a month while working around 250+ hours for that salary.

yes, it applies.

http://cobrands.business.findlaw.com/em ... 7298B.html

It's also worth noting that states that have taken it upon themselves to raise their own minimum wage did not suffer from job loss or inflation. In fact, their economies grew because the raise gave a larger amount of the workforce more disposable income. I don't have a link, as I read it a long time ago, but a study of two states that went up to around $7/hour was done, and the results were in direct contrast to the naysayers of raising the minimum wage.

It is true that raising the federal minimum wage will effect a very small percentage of the workforce, but the mere fact that anyone still makes $5.15/hour is outrageous.

Hahah, just like Louisiana, Alabama, Mississippi, South Carolina. The masses are flocking to live in those free, democratic, and prosperous societies.

Thanks Davo

I would love to work a state job. Why don't you tell everyone about your tax advantages?