Minimum Wage Increase Likely to Remain Tied to War Bill

Caitlin G. Johnson, OneWorld US
Thu May 17, 5:58 PM ET


NEW YORK, May 17 (OneWorld) - A Congressional plan to give the
United States' lowest-paid workers their first raise in nearly 10
years was put on hold earlier this month when U.S. President George
W. Bush vetoed the Iraq War spending bill.

A minimum wage clause appended to the war bill would have guaranteed
all U.S. workers a salary of at least $7.25 per hour by 2009. The
current federal minimum wage has been set at $5.15 per hour since
1997.

The American Friends Service Committee and Let Justice Roll, a
nonpartisan coalition of more than 90 faith and community
organizations, have launched a campaign to ask Congress to remove
the minimum wage bill from the war funding legislation, saying, "a
minimum wage raise deserves to move forward on its own merits." More
than 650 business owners and executives have signed on to the
affiliated Business for Shared Prosperity campaign.

But it is not clear that a stand-alone minimum wage bill would gain
speedy Congressional approval.

Earlier this year the U.S. Senate and House of Representatives both
voted to raise the federal minimum wage, but differed over
accompanying tax breaks for businesses; the Senate bill contained
$8.3 billion in business-related tax breaks, while the House
rejected all but $1.3 billion in its version. Instead of reconciling
the two into one bill, a version with a negotiated $4.8 billion of
tax breaks was attached to the war supplemental funding bill passed
by Congress.

Katy Heins, program coordinator with Let Justice Roll, says the
minimum wage plan was attached to the war supplemental bill because
the latter is considered "must-pass" legislation that will move
quickly, despite the controversy over a timeline for withdrawal in
Iraq.

"We understand that Congressional leadership felt Senate Republicans
would filibuster a stand-alone minimum wage bill without the tax
breaks they want, and it was included in this bill in order to keep
it moving," says Heins.

"We are now asking the Congressional leadership to take a stand and
start negotiating the bill on its own. If it gets vetoed again, we
will be back at ground zero with this bill that is important for
millions of workers," she says.

Since the Let Justice Roll campaign launched efforts on May 9 to
press for a stand-alone minimum wage bill, the group says it has
generated 1,200 calls to Congress and nearly 9,000 emails.

Still, the fate of the federal minimum wage increase remains
unclear. The office of Sen. Edward Kennedy (news, bio, voting
record) (D-MA), who sponsored the Senate minimum wage bill, expects
it to remain attached to the war spending bill. "That's the best
vehicle to get it into law this year," a Kennedy spokesperson told
OneWorld.

Another version of the bill may reach President Bush's desk at the
end of May or early June.

While lawmakers continue to disagree over the economic impacts of a
minimum wage increase, a recent study from the nonpartisan Fiscal
Policy Institute found no evidence that a higher minimum wage would
adversely impact small businesses. Since 1998, the number of small
businesses and the number of workers employed by small businesses
have grown faster in states with a higher minimum wage than in those
requiring only the federal minimum wage, the study found.

And it's not just teens with summer jobs who would benefit from a
minimum wage hike, says the Washington, DC-based Economic Policy
Institute, debunking a common argument against the legislation. Of
the estimated 13 million workers who would see their salaries rise,
79 percent are adult breadwinners, the think tank says, adding that
nearly half of families headed by a low-wage worker rely solely on
those earnings.

Yet even the proposed minimum wage increase would not provide low-
wage workers in the United States the earning potential they enjoyed
decades ago.

"There's a sad irony in the pending bill to increase the minimum
wage," says Jodie Levin-Epstein, deputy director of the Center for
Law and Social Policy, a nonprofit research group that advocates on
behalf of low-income Americans. "Namely, while a win makes a big
difference for the 2.2 million workers who earn at or below the
current wage, the raise will not get them what minimum wage earners
got back in the '50s and '60s."

Back then, says Levin-Epstein, the minimum wage was roughly half of
the average wage of the typical worker -- or the equivalent of about
$8.40 today.

Today, inflation has left the minimum wage at its lowest real value
in over 50 years. The nonpartisan Center on Budget and Policy
Priorities says a family of four with a full-time minimum-wage
earner stills lives below the poverty line, even after food stamps
and the Earned Income Tax Credit (EITC) are factored in.

A bump up to $7.25 per hour in 2009 would still leave that family of
four about $7,400 short of the poverty line unless it receives food
stamps, the EITC, and the Child Tax Credit.

For this reason, the American Friends Service Committee and Let
Justice Roll say a federal minimum wage raise should be just a first
step.

"It is an important step that would put millions of dollars in the
pockets of low-wage workers and make a real impact on poverty," says
Roberta Spivek, who coordinates the American Friends Service
Committee's national economic justice program. "But $7.25 is not the
ultimate goal of this campaign. It's far below what families
actually need in just about all parts of the country."

In addition to the federal law, the campaign is supporting state and
local efforts to raise state minimum wage levels or enact "living
wage" laws that take into account the actual cost of living in a
certain area, and often include annual increases for inflation.

To date, 32 states and the District of Columbia have set their
minimum wages above the federal level, according to the Economic
Policy Institute.

"While Congress has not done what it needs to do for low-wage
workers, people at the grassroots have moved it forward in states,"
says Spivek. "There is tremendous momentum for this."


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