House Passes Minimum Wage Boost

Democratic-Controlled House Votes To Increase Wage To $7.25 An Hour

(CBS/AP)  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.

"You should not be relegated to poverty if you work hard and play by the rules," said House Majority Leader Steny Hoyer, 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 bill may end up being combined with tax breaks for small business before passing in the Senate, reports CBS News Capitol Hill correspondent Bob Fuss.

The last increase was in 1997, when 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 President Bush was in the White House.

Organized labor and other supporters pitched the bill as badly needed assistance for the working poor.

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 this would be directly affected, according to the Economic Policy Institute, a liberal leaning group. The group estimates that another 7.4 million workers would benefit indirectly as raising the floor would ripple through the work force.

"We are talking about raising the living standards of 13 million workers," the institute's Leanna Fox told CBS News correspondent John Hartge.

That means higher payroll costs for employers.

"The few low-skilled adults who hold these jobs, who basically have a skills deficit, those people, research has shown, are most likely to lose their jobs," Mike Flynn of the Employment Policy Institute told Hartge.

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, R-Ohio, contending the legislation doesn't do anything to help offset that burden.

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.

The retail group expressed concern about the "lack of balance" in the House bill because it doesn't include other provisions to help ease the economic impact on companies.

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.

But AFL-CIO President John Sweeney shot back saying: "An increase in pay for America's lowest-paid workers should not have to depend on additional payoffs to business."

Both the House and Senate minimum wage bills also would extend the minimum wage — on a separate time table — to employers on the Northern Mariana Islands, a U.S. territory.

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 when voters -upset with the Iraq war and President Bush's leadership — put Democrats in charge in both the House and Senate. Last week Democrats, convening the new 110th Congress, took power for the first time in a dozen years.

[cseeker400]

The United States has spent and will spend more than 3.5 billion dollars in Iraq; an amount that would make millionaires of every person in America. Social security could have been made solvent for all time. National health care could have been funded; with enormous benefit too the country.So a minimum wage increase of $2.10 is a small, small drop in the bucket and is nothing at all to be proud of.

[kmilan1205]

I believe that minmum wage needs go up. At 5.15 an hour just does not help me and my family. Look at it this way rent above 400.00 a month, food for 3 in a family runs about 65.00 a week, electric and gas 200.00 a month,gas expenses to get back and forth to work 25.00 a week. So far that 960.00 a month 5.15 times 40 hrs at 206.00 a week that is 824.00 a month GROSS thats not including what they take out for taxes. And yes we only get taxes once a yr,thats it, we still have to live for the rest of the yr. Just think thats only the basic bills, thats not including my home necessity for my family. I feel that something needs to be done cause everything has went up in prices, like: gas, local taxes ,food, entertainment, but, nothing has been done to help the lower income family to survive these crazy hikes. And I can't afford health insurance.

I asked, my locals, why are prices going higher, they stated " Well,to answer your question is that we have to pay more to get our deliverys to us so, therefore food gets hiked. All it is a dominoe effect and it all rolls down hill. So, somewhere it needs to end, before there are problems that rise later in our society.

And George Bush thinks its all right for ilegal immigrants to take over our nations minimum wage jobs because, he feels as a nation we are to lazy to do them ourselfs, fact is as a nation we can't afford to survive our minimum wage jobs.

[nicolj3]

Why is American Somoa the only exception in the law? I hear from other sources that there is preferential treatment going on. Why isn't CBS repoirting on it? Preferential treatment?
Let us hear the whole story.

[olgreyghost]

Now sit back and watch the fun! More illegal aliens sneaking into our country to sell their labor at more competitive prices on the "black" market. More "American" companies sending production overseas where labor can be bought at a lower price. More Americans out of a job because they are not worth the artificial price floor set for their labor and they can't negotiate to sell their labor for what the market can bear. And everyone on fixed incomes having to decide between what staple they can do without and which ones they really need as the prices become so high they can easily decide they can't afford both...

Now we know why the government worked so hard to outlaw "pyramid clubs;" it didn't like the competition.