Thursday, June 15, 2006

Minimum wage increase approved by House Appropriations Committee

I like this; studies have shown that a 10% increase in the minimum wage leads to around a 1% increase in unemployment for low and unskilled workers, which statistically is not that significant. Having been on minimum wage many times in the past, I think it's a great idea to increase minimum wage by at LEAST 10% (probably more like 20%), and then to index it to inflation. This would mean an increase of 40%, but it would be spread out over three years and not hurt so badly.

WASHINGTON (Reuters) - A U.S. House of Representatives panel on Tuesday voted to raise the U.S. minimum wage in increments to $7.25 an hour by January 1, 2009.

The House Appropriations Committee backed the proposal by a vote of 32-27 during work on a massive fiscal 2007 funding bill for labor and health programs.

The surprise result came after seven Republicans on the committee supported the Democratic amendment.

But the legislation faces many hurdles, including possible efforts by Republican leaders to have the proposal stricken from the legislation, according to Republican and Democratic aides.

Under the proposal, which was offered by House Minority Whip Steny Hoyer, a Maryland Democrat, the current $5.15-per-hour federal minimum wage would rise in 70-cent increments starting January 1, 2007. On that date, the minimum wage would be set at $5.85 and a year later it would go to $6.55 before topping off at $7.25 in 2009.

Opponents, using House rules, could argue that this change in law should not be attached to annual spending bills, such as the measure approved by the House Appropriations Committee.

For the last several years, Democrats have been pushing to raise the minimum wage, which has been static since 1997.

Republicans have blocked the move, claiming it would discourage hiring of low-skilled workers and hurt the economy.

The next step for the legislation will be the House Rules Committee, which will have to decide whether to "protect" the amendment as part of the bill or let any lawmaker object to it when the legislation hits the House floor.

"Hopefully, the Rules Committee will protect it and we're going to have a showdown on the minimum wage," Rep. George Miller of California, the senior Democrat on the House Education and Workforce Committee, told reporters.

Hoyer and Miller said there would be bipartisan support for raising the minimum wage for 7.3 million workers if a full debate was allowed on the House floor.

The Senate has not yet debated the fiscal 2007 labor and health spending bill.

Posted by crimnos @ 8:19 AM