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Minimum wage hike approved by House

Federal rate would go from $5.15 to $7.25 an hour over two years. Senate version is likely to include tax breaks.

January 11, 2007|Richard Simon | Times Staff Writer

WASHINGTON — The House's Democratic majority, exercising its new political clout, on Wednesday approved 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 to secure President Bush's signature.

The minimum wage has been unchanged since 1997, the longest period without an increase since the first minimum wage law was enacted in 1938.

California -- where the minimum wage increased to $7.50 an hour on Jan. 1 and will rise to $8 on Jan. 1, 2008 -- is among 29 states, with minimum wages that exceed the existing federal rate. The rate is also higher in Washington, D.C.

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

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

The California delegation voted almost exclusively along party lines: Democrats supported the increase and Republicans opposed it, with the exception of Rep. Mary Bono of Palm Springs, who supported it. Rep. Gary Miller (R-Diamond Bar) did not vote.

Bono said the increase was a "benefit in disguise" to California with its higher minimum wage. "California-based businesses will reconsider the costs associated with moving out of state to seek cheaper labor," she said.

"What a difference an election makes," said Rep. George Miller (D-Martinez), chairman of the House Education and Workforce Committee.

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

House Majority Leader Steny H. Hoyer (D-Md.) said workers relying on $5.15 an hour were "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 two months after the legislation was enacted, to $6.55 a year later and to $7.25 after another year.

The minimum wage, first enacted at 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 (R-Texas) contended that employers would cut jobs and benefits to pay for the wage increase.

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

Senate debate is expected to begin as early as next week.

Sen. Edward M. Kennedy (D-Mass.), chairman of the Senate committee that handles labor issues, has championed the wage increase.

On Wednesday, he called the House vote a "major victory" for 13 million 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 lobbying the Senate for tax breaks. Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, predicted a wage increase would be accompanied by small-business tax breaks 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."

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richard.simon@latimes.com

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Begin text of infobox

New minimum wage

The House of Representatives voted to raise the federal minimum wage, starting 60 days after the bill became law, to $5.85 an hour. It would increase to $6.55 in 2008 and to $7.25 in 2009.

States with minimum wages higher than the current federal rate of $5.15 per hour:

*--* Alaska $7.15 Arizona 6.75 Arkansas 6.25 California 7.50 Colorado 6.85 Connecticut 7.65 Delaware 6.65 Florida 6.67 Hawaii 7.25 Illinois 6.50 Maine 6.75 Maryland 6.15 Massachusetts 7.50 Michigan 6.95 Minnesota 5.25 * Missouri 6.50 Montana 6.15 Nevada 6.15 ** New Jersey 7.15 New York 7.15 North Carolina 6.15 Ohio 6.85 Oregon 7.80 Pennsylvania 6.25 Rhode Island 7.40 Vermont 7.53 Washington 7.93 Washington, D.C. 7.00 West Virginia 5.85 Wisconsin 6.50

*--*

*$6.15 for employers with annual receipts greater than $625,000

**Without benefits; $5.15 otherwise

Note: The first federal minimum wage applied to all employees involved in interstate commerce or the production of goods intended for interstate commerce. Between 1961 and 1977, separate, lower minimum wages were adopted for other employees, including those working in government. Since 1978, there has been a single federal minimum wage.

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Source: U.S. Department of Labor. Graphics reporting by Tom Reinken

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