Let Justice Roll

Note: For reports countering opposition sources cited below, see http://www.letjusticeroll.org/business-support-minimum-wage.html

Wage debate tops agenda for Congress
By Rob Hotakainen
Minneapolis Star-Tribune, 11/18/06

WASHINGTON -- In a sure sign of the power shift created by the midterm election, Congress appears ready to give millions of the nation's lowest-paid workers a raise by increasing the federal minimum wage from $5.15 to $7.25 per hour.

The step would affect thousands of workers and businesses in Minnesota, where the minimum wage is currently $6.15 an hour. It would be the first federally mandated increase in a decade, and some business leaders in the state are warning that it would hurt the economy.

Democrats in Congress say passing the legislation will be among their first orders of business when they become the majority on Capitol Hill in January for the first time in 12 years. The issue also is likely to spotlight the philosophical differences between two of Minnesota's newly elected House members, Democrat Keith Ellison and Republican Michele Bachmann.

Ellison, in his first appearance in Washington since the Nov. 7 elections, skipped a private White House reception with President Bush last week to meet with leaders of the AFL-CIO, the driving force behind the legislation. Ellison said he intends to organize support for the measure.

Ellison contends that a higher minimum wage is needed to help the poor and middle class. Bachmann has argued that the free market should set wages. As a state senator, she questioned the need for a minimum wage, saying there would be less unemployment without it.

The opposition effort

In Washington, the main opposition to the Democratic plan is coming from the National Restaurant Association, which says a recent survey of its members showed that nearly 90 percent of restaurants would raise menu prices in response to a higher minimum wage. Forty-one percent of restaurant operators also said they would cut jobs to pay the higher wages. The association is leading a group of more than 30 business organizations lobbying to stop the proposed increase.

"The vast majority of research by economists indicates that raising the minimum wage forces businesses to cut back on hours, eliminate jobs, reduce benefits or take similar measures to offset the impact," said Dave Siegel, executive vice president of the Minnesota Restaurant and Lodging associations.

Charlie Weaver, executive director of the Minnesota Business Partnership, said the plan would hit other states harder, but he warned that raising the minimum wage would have a "ratcheting-up effect" that would drive all wages higher.

"There's no question it would hit Minnesota businesses, and it would hit small businesses probably the hardest, particular in greater Minnesota," Weaver said. He said that a higher minimum wage, combined with the rising cost of health care for businesses, would hurt job growth.

On the other side of the debate are workers such as Ieisha Wilson, 19, of St. Paul, who makes $6.15 an hour at Goodwill Industries, where she works 30 hours a week. Five months pregnant and living with her mother because she can't afford rent, Wilson hopes she can earn more after she gets her diploma in March. Eventually she plans to attend a community college to study nursing or social work.

In the meantime, she said, an increase in the minimum wage "a really good thing."

The Republican-led Congress last voted to increase the minimum wage in 1996. Since then, some states have acted independently to help poor workers. Twenty-eight states and the District of Columbia already have a minimum wage higher than $5.15 an hour, according to the AFL-CIO.

The issue was potent in this year's elections. Voters in six states -- Missouri, Ohio, Montana, Colorado, Arizona and Nevada -- passed minimum-wage ballot initiatives.

In Missouri, 76 percent of voters approved a ballot measure to increase the minimum wage to $6.50. Exit polls in the state's close Senate race showed that 93 percent of those who voted for the Democratic Senate candidate, Sen.-elect Claire McCaskill, also voted for the minimum-wage increase.

"Minimum wage was the foremost values issue of the 2006 election, bringing people together across all lines," said the Rev. Paul Sherry, national coordinator of a group called the Let Justice Roll Living Wage Campaign, a coalition of more than 80 groups working to increase wages for the poor.

To draw attention to the legislation, the AFL-CIO staged a rally Thursday on Capitol Hill as members of Congress met in a lame-duck session and newcomers were in town for an orientation session.

Relishing their Election Day victories, Democrats had a bounce in their step as they promised to pass a plan proposed by Sen. Edward Kennedy, D-Mass., the incoming chairman of the Senate Committee on Health, Education, Labor and Pensions.

In the House, Speaker-elect Nancy Pelosi, D-Calif., is promising to pass a minimum-wage increase in the first 100 hours of Democratic control.

Under Kennedy's proposal, the minimum wage would rise to $5.85 60 days after the bill is enacted, then to $6.55 after one year and finally to $7.25 after another year. Kennedy and other backers say that minimum-wage employees earn $10,700 per year, almost $6,000 below the federal poverty guidelines for a family of three. They estimate that nearly 15 million Americans would benefit from the plan, which would mean an additional $4,400 a year for low-wage earners.

At the rally, Kennedy said the only thing blocking a higher minimum wage has been Republican leadership. "They've been removed," he roared.

With the legislation gaining momentum, Minnesota Republican Sen. Norm Coleman last week promised to vote for it. If a bill passes by a wide margin, President Bush would be under heavy pressure to sign it, but the White House wasn't tipping its hand last week.

"The president believes we can find a solution that raises the minimum wage while not pricing low-wage workers out of the market and helping job-generating small businesses that could be harmed by this measure," said White House spokesman Alex Conant.

Washington Bureau Correspondent Brady Averill contributed to this report. Rob Hotakainen is a correspondent in the Star Tribune Washington Bureau. rhotakainen@startribune.com

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