Minimum Wage Increase to $7.25 (Federal)

  1. 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.

    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 ([color=#003399]news, [color=#003399]bio, [color=#003399]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 [color=#003399]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 [color=#003399]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 ([color=#003399]news, [color=#003399]bio, [color=#003399]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 ([color=#003399]news, [color=#003399]bio, [color=#003399]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 ([color=#003399]news, [color=#003399]bio, [color=#003399]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.
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    house minimum wage bill hr 2 senate minimum wage bill s 2

    http://news.yahoo.com/s/ap/minimum_wage
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  2. 27 Comments

  3. by   TheCommuter
    I think the minimum wage increase is much welcomed and badly needed during these economic times. After all, the overall cost-of-living has skyrocketed in many parts of the country.
  4. by   HM2VikingRN
    Its definitely overdue! Now for single payer health care!
  5. by   wtbcrna
    I never have been a big fan of minimum wage increases. It rarely does what it supposed to do. The increase is mostly political. Here is a nice artice from one of the newspapers in San Antonio. http://www.mysanantonio.com/business...s.2716640.html
  6. by   ZASHAGALKA
    The minimum wage should either be 100 bucks/hr . . . or zero.

    http://www.realclearpolitics.com/art...ld_be_0_e.html

    Two stats:

    "U.S. Labor Department statistics for 2005, the latest available, show that only 479,000 workers earned the minimum wage, out of a total U.S. work force of more than 150 million."

    And:

    "Sixty percent (of those 479,000 mw earners) work part-time and their average household income is well over $40,000."

    By far, most minimum wage workers are part time teenagers earning spending money in households that are far above poverty level.

    Make no mistake, MW is the exact same kind of class warfare that democrats normally pay lipservice about: the haves stealing from the havenots. Increasing MW is not about helping the poor. It IS about re-aligning union wage scales at the expense of the poor. So, those in the $10-15/hr range get a raise, while those at the bottom get squeezed even more between those above them, and the illegals that will completely undercut them from below.

    MW is just another 'screw the poor' reform. After all, those middle class earners about to get their union wage scale raise because of MW are the REAL base voters, right?

    ~faith,
    Timothy (winning the lotto, one vote at a time.)
    Last edit by ZASHAGALKA on Jan 11, '07
  7. by   Cherish
    I honestly think the minimum wage increase is great. Even if people in the 10-15 pay rate get a raise thats even greater. Usually people who are in this range are single parent moms. Who don't qualify for programs like free lunches, etc. Because technically they are not that poor but can still need some help. How many people have I heard personnaly or someone saying that they could use the help but make a little above the maximum. That's very sad. Gas has increased, pay phone, damn soda machines are 1.25, etc but pay hasn't? If the economy increases but then almost 10 yrs later the wages actually somewhat 'barely' cover for it thats a shame. In 2 yrs or so it will be 7.25 so people wages hopefully will increase they NEED to everything else has. The economy increases no stopping that but your pay must increase also.
  8. by   wtbcrna
    Quote from Cherish
    I honestly think the minimum wage increase is great. Even if people in the 10-15 pay rate get a raise thats even greater. Usually people who are in this range are single parent moms. Who don't qualify for programs like free lunches, etc. Because technically they are not that poor but can still need some help. How many people have I heard personnaly or someone saying that they could use the help but make a little above the maximum. That's very sad. Gas has increased, pay phone, damn soda machines are 1.25, etc but pay hasn't? If the economy increases but then almost 10 yrs later the wages actually somewhat 'barely' cover for it thats a shame. In 2 yrs or so it will be 7.25 so people wages hopefully will increase they NEED to everything else has. The economy increases no stopping that but your pay must increase also.
    The thing you have to remeber is when minimum wage goes up inflation will go up, and then cost of living will go up. Stores/Fast food chains etc, will raise their prices the same day that minimum wage goes up and any price increases they have been thinking about doing will be snuck in there and blamed on minimum wage increase.
    Minimum Wage increase is nothing more than politically ploy....
  9. by   ZASHAGALKA
    Quote from wtbcrna
    The thing you have to remeber is when minimum wage goes up inflation will go up, and then cost of living will go up. Stores/Fast food chains etc, will raise their prices the same day that minimum wage goes up and any price increases they have been thinking about doing will be snuck in there and blamed on minimum wage increase.
    Minimum Wage increase is nothing more than politically ploy....
    As that inflation goes up, the Fed increases interest rates to stave it off, so not only do the prices of goods and services go up, but so does the price of credit.

    That affects your credit card balances every month, the rates you will pay for a car, for a house, etc.

    In effect, it depresses job opportunities for unskilled labor, and increases the cost of living for those low middle class working single moms, increasing the costs of everything.

    It's this simple: if there's a reasonable argument for 7.25, then there is a reasonable argument for 100/hr. The only differences is that you can rationally see the result of 100/hr: a massive re-aligning of the economy and what things costs. In reality, that same effect occurs with any raise in the minimum wage, it's just proportional to the raise.

    Those at the bottom can least afford those ripples. This is anti-poor: stealing opportunities from the poorest, not likely to vote and handing those opportunities one level up, to lower middle class, who DO vote. But, it's all a game. That little extra kick in the paycheck is a nice emotional punch, but it's all taken back, and more, in the incremental across the board increases that result.

    MW is a con job. It's that simple. At it's root is a misconception: let's stick it to business. In reality, the 'costs' of business are ALWAYS passed back to the consumer. ALWAYS - and normally, and then some.

    ~faith,
    Timothy.
    Last edit by ZASHAGALKA on Jan 11, '07
  10. by   Cherish
    Inflation has ALREADY gone up...or am I the only one seeing this?

    Federal student loans interest increased...but hey keep it at 5.15, which happens to be the Work Study amount...VA Work Study yeah you don't get taxed but its a great pay.

    How about keeping it at 5.15 and let the inflation and economy keep on rising...keeps EVERYONE happy.
    Last edit by Cherish on Jan 11, '07
  11. by   RNsRWe
    I think, skimming this thread, that my opinion has probably been covered by a couple of the posters here. But what the heck, I have a few minutes

    The concept of an increase in the minimum wage is good, but in practice it's completely irrelevent. What I mean is, how many people really WORK for minimum wage? Who are these poverty-stricken folks who actually work for $5.15 per hour (legally, on the books)? Are they under the poverty line because they work a 40-hour workweek at $5.15 per hour? Nope. They're under the poverty line being paid considerably more.

    McDonald's pays more. Dishwashers in restaurants and hotels get more. So do gardeners and janitors and the people who clean the parks. I sure as heck know our care techs get more. So who exactly is this new increase benefitting? Minimum wage as payment is actually rare, and tends to be relegated to part-time employment (not the full-time, family-supporting notion presented as the need for the increase).

    People who are already making above the minimum wage won't see more money because that base has increased. The only people who WILL see an increase would be the teenagers who traditionally work part-time while in high-school. And since these part-time jobs aren't used to provide for a family of four, but rather a new iPod, they don't really need this legislation, do they?
  12. by   Soup Turtle
    The poor will still be poor. Poverty is relative and can't be erased. An increase sounds nice, but I really don't think it accomplishes anything. There may be a temporary good effect for low wage earners and a temporary bad effect for small businesses, but in the end, everyone falls back in line.
  13. by   nurse4theplanet
    The minimum wage increase is a total farce! It is merely a band-aid for much larger problems. It's the governments way of pacifying the public without dealing with issues that are clearly more difficult to resolve...such as inflation, increasing cost of living, outrageous gas prices, increasing health care costs, etc. etc. as other posters have pointed out. Do not be deceived....this is a quick fix.

    Even to those who don't have the slightest clue about the basic principles of economics....just look at history. Less than 20 yrs ago, MW was about $4.15 or so. Obviously, it's been raised several times since then and what has been the result? A few years go by, prices of goods continue to rise, interest rates rise, inflation persists, cost of living rises and eventually the MW is just as insignificant as it was before. So the quick fix, raise it again! The whole process starts over. Obviously, raising the mw is NOT working.

    It doesn't take a rocket scientist to understand the concept that money problems can not be solved by getting more money (any debt counselor will testify to that). This is just as easily applied to the economy, as it is to an individual household. Our citizens issues with poverty, inability to keep up with the cost of living, and lack of affordable healthcare has NOTHING to do with minimum wage and EVERYTHING to do with failures in our government.

    This WILL have a devastating effect on our economy. We are slowly killing off our small business. My concern is not who the MW usually goes to (as some have argued that teenagers with little financial responsibility will be the beneficiaries of the increase.) My concern is who can REALLY afford to institute a MW increase for their employees without cutting costs somewhere else (insurance, sick pay/OT/vacation, incentives/bonuses). Here's a clue: it won't be Walmart or McDonald's. It will be the mom and pop shops who are struggling to meet the needs for their employees already. I am not easily pacified with the statement ensuring that tax breaks and incentives will be instituted to protect small business. Again, lets look at history: just in the past 20 yrs as this MW increase cycle persists BIG business is getting bigger and small business is becoming obselete.

    I don't want to see anybody in poverty and I DO NOT believe you can live on $5.15 an hour, even if you are single, without some type of government assistance. But I strongly believe that raising the MW will not correct longterm problems that are making it impossible to live on such a low wage in the first place. Like I said, it's just a quick fix. Just my two cents.
  14. by   bethin
    Tim, maybe you should come and visit my little hometown. There's a small county hospital and 5 fast food restaurants and 2 nicer restaurants. Half the factories have closed. Sure, people could drive 2 hours (one way)to the city where they are closing factories too. So, if you want an income of any kind, most of these former factory workers are working in fast food. The minimum wage now, if these people are lucky, will barely keep food on the table and clothes on their families backs. I think the minimum wage is long overdue.

    On the plus side, Honda is building a HUGE factory on the edge of town with wages promised at $20/hr starting out. But I imagine alot of people want that kind of money so competition is going to be fierce. And the factory isn't going to be completed until 2009.

    I see your point Tim, and I read the statistics you stated, but I also see the homeless in my little town (pop. less than 10,000). I think you choose to see the negative side of things and I choose to see the human side of things.

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