Congress Passes
Increase in the Minimum Wage
By STEPHEN LABATON,
NYTimes on the Web, May 27, 2007
WASHINGTON, May 24 -- Congress
handed a major victory to low-income workers on Thursday night by approving the
first increase in the federal minimum wage rate in a decade.
By a vote of 348 to 73, the House approved the measure as part of a deal on Iraq
spending. Less than two hours later, the wage increase was approved in the
Senate, where it was combined with a bill providing more money for the Iraq war.
That vote was 80 to 14.
The measure would raise the minimum wage to $7.25 an hour from $5.15 in three
stages over two years. The bill includes $4.84 billion in tax breaks for
small businesses. They have made a case, supported by Republicans and the
White House, that the wage increase would be a burden for them.
President Bush said he would sign the measure as part of the bigger spending
package that had been negotiated between Democratic lawmakers and the
administration.
After the bill is signed, the wage increase will become the first item in the
“Six for ’06” agenda of the new Congressional Democratic leadership to become
law.
Speaker Nancy Pelosi, Democrat of California, said the increase was overdue.
“After 10 years of indifference,” Ms. Pelosi said, “we are raising wages for the
hardest-working Americans.”
The House and Senate approved the increase months ago in different packages, but
it stalled over disagreements about the tax breaks. Republicans had sought
larger tax breaks for businesses.
The minimum wage was an important sweetener for Democrats in dealing with the
larger package, which includes money for the military in Iraq and Afghanistan
and which had been delayed by a partisan battle over imposing a timetable to
reduce troop levels in Iraq.
Although more than half the states have higher minimum wages than the existing
federal rate, the Economic Policy Institute, a liberal research group, estimates
that 4 percent of the work force, or 5.6 million workers, earns less than $7.25
an hour.
President Bill Clinton signed the last increase in 1997. Seven states now
have minimum wages higher than $7.25 an hour.
A number of business interests lobbied strongly against the increase. One
group, the National Restaurant Association, said the last increase led to a
reduction of 146,000 jobs in the industry and prompted owners to postpone plans
to hire an additional 106,000 workers.
The House debate over the wage was limited, as most lawmakers spent their floor
time arguing over Iraq spending.
Representative John A. Boehner, Republican of Ohio and the House minority
leader, criticized the wage provision along with a set of domestic spending
measures attached to what was viewed as “must pass legislation.”
“We’ve got a host of issues that don’t deserve to be put on the backs of the
military,” Mr. Boehner said. “It’s a sneaky way to do business.”
Democrats countered that Congress had waited too long and that many workers had
suffered because of the lower rate.
“Wages have been unconscionably frozen for the last decade” said Representative
David R. Obey, Democrat of Wisconsin and chairman of the House Appropriations
Committee.
Representative George Miller, Democrat of California and chairman of the House
Education and Labor Committee, estimated that in the first year that the full
increase would take effect, it would provide a family of three with money to buy
an additional 15 months of groceries.
In addition to the tax breaks, the Iraq spending bill had benefits for
businesses. Major airline carriers, for example, successfully lobbied for
a provision to relieve them of some pension liabilities.
The National Association of Manufacturers succeeded in having a provision
stricken that would have blocked federal officials from lowering tougher state
safety standards for chemical plants.
The bill includes $6.3 billion more for areas damaged by Hurricanes Katrina,
Rita and Wilma, $600 million for health insurance for children in low-income
families and $3 billion for aid in farm disasters.
The White House had opposed many of the domestic spending provisions, which
totaled $22 billion. Republicans managed to remove some of them shortly
before the bill reached the floor, including $660 million to stockpile medicine
for a flu pandemic and $400 million for energy assistance for low-income
families.
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