US Senate votes first hike in minimum wage in a decade

[Ron Burgundy]

AFP - The US Senate has voted overwhelmingly to raise the federal minimum wage for the first time in nearly a decade, a major promise of new Democratic congressional leaders.

Lawmakers voted 94 to three Thursday to raise the wages rate by 2.10 dollars per hour -- from 5.15 dollars an hour to 7.25 dollars.

That means the annual salary for a full-time minimum-wage worker would rise from about 11,000 dollars a year to about 15,000.

The House approved a similar measure on January 10, and the two bills will now have to be reconciled before going to the desk of President George W. Bush, to be signed into law.

"We haven't resolved anything," cautioned Charles Rangel (news, bio, voting record) of New York, chairman of the Ways and Means Committee.

One major difference to iron out is that the Senate's version provides 8.3 billion dollars in Republican-backed tax breaks to help small businesses compensate for the impact of the wage hikes.

Senate's new majority leader Harry Reid (news, bio, voting record) said after the vote that the bill's passage was a long-deferred victory for the common worker.

"Democrats in both the House and Senate have kept yet another one of their promises to move America in a new direction, and we will continue to do so," Reid said.

"For the first time in 10 years, Congress voted in a bipartisan fashion to increase the minimum wage. In the time since the last minimum wage increase, household costs have risen -- including the price of gas, the price of food and the price of health care," the Democratic lawmaker said.

"This increase is long over-due and with today's vote, we have given hard working Americans, struggling to get by, the raise they deserve," he said.

Bush also praised the vote, along with the provision providing tax relief to small-business owners.

"Today, the Senate has passed significant legislation that will benefit America's workers and small businesses," Bush said in a statement.

"By working in a bipartisan way to match a minimum wage increase with tax relief for small businesses, the Senate has taken a step toward helping maintain a strong and dynamic labor market and promoting continued economic growth."

Labor groups however, were not entirely cheered by the win, and took exception to the perks for business, saying that the discrepancies between the pared down House bill and the tax break-loaded up Senate legislation might prove difficult to reconcile.

"It's disgraceful that the Senate is still holding the minimum wage hostage to tax cuts for business," AFL-CIO President John Sweeney said in a statement.

"In the last 10 years, the Republican-led Congress provided corporations with a whopping 276 billion dollars in tax cuts and provided small businesses with another 36 billion dollars in dedicated tax breaks, while America's lowest-paid workers have gotten nothing," said Sweeney, leader of the largest and most powerful labor confederation.

"It's shameful that they must now wait even longer because of the Senate's insistence on business tax giveaways," Sweeney said.

US industry was not much happier. Despite the promise of tax relief in the Senate bill, American business interests -- which have long maintained that boosting the minimum wage would raise the transaction costs and would hurt the national economy -- expressed bitter disappointment.

"Any minimum wage increase will significantly affect the bottom line of the nation's small business owners," said Bruce Josten, a spokesman for the United States Chamber of Commerce.

"The increase will not help those it is purported to help and will force many small businesses to reduce employee hours, benefits and new hires, and may even lead to layoffs," he said.

Josten added that the tax package designed to offset the cost of the minimum wage increase accompanying the legislation, rather than being a boon for small business was a "bad deal" because the tax relief is temporary while the tax increases are permanent.

Still, opinion polls show widespread support across the United States for a hike in the minimum wage, which has been frozen at 5.15 dollars per hour since 1997.

source: http://news.yahoo.com/s/afp/20070202/ts_alt_afp/uscongresswagepaypolitics [link]