Yesterday, the Senate voted on a House bill to increase the Federal Minimum Wage to $7.25 an hour from $5.15 over two years. The amended bill passed 94-3, with 3 Senators [Johnson (D-SD), Schumer (D-NY), Inhofe (R-OK)] not voting. Coburn (R-OK), DeMint (R-SC), and Kyl (R-AZ) voted against the bill.
Last week, Senator Wayne Allard (R-CO) introduced a bill that would have eliminated the Federal Minimum Wage entirely and left the wage rate for the lowest-paid workers to each state. In Kansas, this would mean that workers would revert to the state-mandated minimum wage of $2.65 per hour, which is currently superseded by the federal minimum of $5.15.
As of January 2007, twenty-states had a higher minimum wage than the federal wage. Five states had no minimum wage.
These 28 Senators voted to eliminate the Federal Minimum Wage on January 24, 2007:
Alexander (R-TN)
Allard (R-CO)
Bennett (R-UT)
Bond (R-MO)
Brownback (R-KS)
Bunning (R-KY)
Burr (R-NC)
Chambliss (R-GA)
Coburn (R-OK)
Cochran (R-MS)
Cornyn (R-TX)
Craig (R-ID)
Crapo (R-ID)
DeMint (R-SC)
Ensign (R-NV)
Enzi (R-WY)
Graham (R-SC)
Gregg (R-NH)
Hagel (R-NE)
Hatch (R-UT)
Inhofe (R-OK)
Isakson (R-GA)
Kyl (R-AZ)
Lott (R-MS)
McCain (R-AZ)
McConnell (R-KY)
Sununu (R-NH)
Thomas (R-WY)
Why did 24 of these Senators change their mind? Because Senate leaders added small-business tax breaks to the bill. House leaders say those tax breaks, worth $8.3 billion over 10 years, are unacceptable. They say businesses need no additional help after six years of breaks from the Bush administration.
Democrats were less effusive. After the vote, presidential candidates Hillary Rodham Clinton (D-N.Y.) and Barack Obama (D-Ill.) lined up at a news conference with the bill's sponsor, Sen. Edward M. Kennedy (D-Mass.), and bemoaned the complications. Earlier, Majority Leader Harry Reid (D-Nev.) said he would prefer to pass a minimum-wage increase without "all these business pieces of sugar."
Reid predicts the differences would be worked out by a conference committee. House leaders have demanded that the tax measures be stripped from the bill. Negotiations could be lengthy.
As ThinkProgress noted, Republican objections to a clean minimum wage increase are based on myths:
MYTH #1 — Raising the minimum wage will hurt businesses. A study by the Center for American Progress found that employment in small businesses, the number of small businesses, and inflation-adjusted small business payroll growth grew more in states with higher minimum wages than federal minimum wage states. Almost 300 large and small business owners across the country have signed on to Business for a Fair Minimum Wage, which is pushing Congress to raise the federal minimum wage. A recent Gallup poll found that “three out of four small businesses said that an increase in the minimum wage would have no effect on their company.”
MYTH #2 — Businesses can’t afford to give workers a wage increase. In the past 10 years, Congress has “showered corporations with $276 billion in tax breaks, plus another $36 billion aimed exclusively at small businesses.” Steven Pearlstein of the Washington Post adds that even though the Bush administration has gifted declining tax rates to small businesses over the past several years, “according to the Internal Revenue Service, small-business owners, sole proprietors and the self-employed are, as a group, the biggest tax cheats in America, responsible for $153 billion of the estimated $345 billion tax gap in 2001.”
It's worth noting that Congressional salaries have increased from $133,600 to $165,200 per year since the last Federal Minimum Wage increase. And a cost-of-living-adjustment (COLA) increase takes effect annually unless Congress votes to not accept it.
