House Passes Minimum Wage Increase: A Decade of Inaction at an End

by Mike Hall, Jan 10, 2007

For 10 years, House Republicans refused to vote on raising the minimum wage, and millions of workers suffered and struggled earning just $5.15 an hour. They watched the value of that $5.15 shrink and shrink year by year.

Today, in the first hours of business of the 110th Congress and with Democrats back at the helm, the House voted 315-116 to give what economists say could be as many as 13 million low-wage workers a raise. Big Business is likely to target a similar bill in the Senate for special-interest provisions. (Click here to send a message to your senator urging support of a clean minimum wage bill with no business giveaways.)

H.R. 2, introduced by George Miller (D-Calif.), would provide a $2.10-an-hour raise over two years, with no special-interest giveaways to corporations that already have reaped tens of billions of dollars in tax breaks from the Bush administration and the previously Republican-controlled Congress.

AFL-CIO President John Sweeney says the House vote shows:

Our new Congress is listening to what working Americans said last November. It heard their call for change and is working to right a big wrong and pass a minimum wage increase. Our new Congress is saying to working people: “This country doesn’t belong only to the giant corporations and the fat-cat lobbyists. You deserve a decent day’s pay for a decent day’s work. No more excuses. No more delays.

The decade of inaction on the minimum wage eroded its real buying power to the lowest point in more than 50 years and brings a full-time minimum wage worker just $206 a week, $10,400 a year, far below the poverty line for even a small family. The increases in H.R. 2 mean a worker will bring home an additional $4,400 a year. That figure translates into 15 months of groceries or two years of health care for a family of three, according to testimony last year before the House Oversight and Government Reform Committee.

With Congress failing to act, the AFL-CIO’s America Needs a Raise campaign, along with progressive allies such as ACORN, took the fight to the state level. The overwhelmingly popular and successful mobilization won minimum wage increases in 17 states through legislation or ballot box victories. The highlight came Nov. 7 when voters is six states resoundingly approved minimum wage ballot measures.

Miller, chairman of the House Education and Labor Committee, puts it this way:

It is a moral outrage that millions of Americans who work full time still live in poverty. If we truly value work, then we have to ensure that it is fairly rewarded.

Shortly before the House vote, Miller, Sweeney, House Majority Leader Steny Hoyer (D-Md.), Sen. Edward Kennedy (D- Mass.) and others urged the Senate to turn back  business tax cut giveaways and pass a clean minimum wage bill.

As Kennedy said:

We cannot slow down this important legislation with other proposals that should stand or fall on their own merit. Minimum wage workers have waited almost 10 long years for an increase. We need to pass a clean bill giving them an increase as quickly as possible.

This morning, Jared Bernstein, senior economist at the Economic Policy Institute (EPI), told the Senate Finance Committee:

There is little rationale for adding any tax cuts to this bill. Businesses both large and small have enjoyed hundreds of billions of dollars of such cuts over the past decade, as the value of the federal minimum wage has evaporated. The wage increase under consideration is a small one in historical terms and it is very likely that any tax cuts intended to offset its costs to businesses will swamp in magnitude. And while the wage increases has no fiscal costs, the same cannot be said for tax cuts. They must either add to the federal deficit, or under the new PAYGO rules, by revenue additions or spending cuts elsewhere.

(Under new House rules, any legislation that adds to the federal deficit must either be offset by spending cuts in other programs or by tax increases—pay as you go, PAYGO.)

Last month Bush said he would support a minimum wage increase only if it contained more gifts to the business community.

Says Sweeney:

In the past 10 years, in fact, the Republican-led Congress provided corporations with $276 billion in tax cuts and provided small businesses with another $36 billion in dedicated tax breaks.

An increase in pay for America’s lowest paid workers should not have to depend on even more payoffs to business. And so today we’re calling on Senators—Republicans and Democrats alike—to reject corporate poison pills and vote for a fair, long overdue raise in the minimum wage. America’s workers deserve a clean vote on a $7.25 minimum wage, with no strings attached.

Also today, The Washington Post columnist Steven Pearlstein sharply criticized Finance Committee Chairman Max Baucus (D-Mont.) for backing additional business tax breaks as part of the minimum wage legislation. Pearlstein wrote that he expected tax cut witnesses at today’s Capitol Hill hearing to predict end-of-the-world, economic calamity for small businesses if the minimum wage is increased without more tax breaks:

No doubt [they] will point out that workers making at or near the federal minimum wage are nearly all employed by small businesses. We will hear all the sob stories about how struggling small businesses with thin margins will be forced to cut back on hiring, pull back on expansion plans and, in some instances, close their doors. Moreover, this won’t be a tragedy just for small-business owners and employees but for the economy as a whole, since everybody knows that small business creates virtually all new jobs. Only another round of tax breaks can keep the great American jobs machine humming.

And here’s the thing: Most of it is nonsense.

Click here to read the entire column.

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