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Minimum Wage Debate on the Horizon

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June 17, 2004 -- With worries about many low paying jobs having already been lost abroad, Congress will consider whether those left behind will get a mandatory pay raise when it debates two proposed amendments to the federal minimum wage rate over the summer.

A Democratic bill sponsored by Massachusetts' Senator Edward M. Kennedy and co-sponsored by presidential-hopeful Massachusetts' Senator John Kerry would raise the current minimum hourly wage from $5.15 to $5.85 within 60 days of the passage of the bill and then to $6.45 by 2005 and finally to $7 by 2006.

Republican Senator Mitch McConnell of Kentucky is rumored to be backing a bill that would raise the minimum wage to $6.25 per hour.

The federal minimum wage rate was last raised in September 1997, when it increased $0.40. The nearly seven years without an increase is the longest such stretch since the Fair Labor Standards Act, which sets the federal minimum wage, went into effect in 1938.

The raise would be welcome news to many workers. The increase to $7 would directly affect 7.4 million workers, according to the Economic Policy Institute, a liberal research group. Others making slightly more might also expect their pay to grow. The EPI estimates that an increase to $6.25 would affect the wages of 4.1 million workers.

However, the raise to $7 represents a 36 percent increase over two years. Such a leap would certainly stretch a few budgets, especially in industries with tight margins. The result might be reduced hours, or even lost jobs.





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