U.S. minimum wage legislation

The minimum wage is the lowest amount that employers may pay employees for an hour of labor. In the U.S., both the federal government and individual states are entitled to set a minimum wage. When the two differ, the higher wage applies. As of January 2007, twenty-states had a higher minimum wage than the federal wage, while only one (Kansas) had a lower wage. Five states had no minimum wage, while fifteen had one identical to the federal wage.

When the Democratic Party took control of both houses of Congress following the 2006 congressional elections, it promised to increase the federal wage to $7.25/hr. in its "first 100 hours" on the floor. On January 10, 2007, the House did so through the passage of H.R. 2 by a vote of 315-116. On January 30, 2007, the Senate ended debate on a bill (clearing it for a vote on the floor) which would raise the wage to $7.25, and also provide roughly $8.3 billion worth of tax breaks for small businesses. In May 2007, the wage hike, along with some of the tax breaks, was included in a supplemental spending bill regarding the Iraq War. On May 25, 2007, President George W. Bush signed the bill into law. The first wage increase occurred on June 24, 2007, bringing the minimum wage to $5.85.

House passes increase in "first 100 hours" of 110th Congress
On January 5, 2007, Rep. George Miller (D-Calif.), chair of the House Committee on Education and Labor, introduced H.R. 2, the Fair Minimum Wage Act of 2007, a bill which would amend the 1938 Fair Labor Standards Act to increase the federal minimum wage from $5.15 to $7.25 in three steps over a period of twenty-six months.



On January 10, the bill passed 315-116. All 233 House Democrats supported the measure, along with 82 Republicans. In support of the bill, House Majority Leader Steny Hoyer (D-Md.) said "You should not be relegated to poverty if you work hard and play by the rules." Rep. Steve Chabot (R-Ind.), an opponent of the bill, said "This bill increases costs for mom-and-pop businesses." The Bush Administration agreed, and announced its opposition because the bill "fails to provide relief to small businesses.



In December 2006, Bush had stated that he would support an increase to $7.25 if it was coupled with a tax breaks and a loosening of regulations on businesses.

Senate considers minimum wage increase
Following the House vote, Senate Democratic leaders, including Majority Leader Harry Reid (D-Nev.), said that they would soon address the minimum wage increase. Reid signaled, however, that the chamber would likely accept changes designed to shield small businesses from adverse consequences of higher labor costs.

On January 23, 2007, the Senate voted 54-43 on a cloture motion to bring a vote on H.R. 2 (the minimum wage increase without tax breaks) to the floor. Because the vote required 60 votes to proceed, it failed.



Sen. Ted Kennedy (D-Mass.), a supporter of the wage hike without tax breaks, stated, "Why can't we do just one thing for minimum wage workers, no strings attached, no giveaways for the powerful?" Following the vote, Majority Leader Reid promised to pursue passage of a wage bill which included an $8.3-billion tax package that would extend for five years a tax credit for employers who hire low-income or disadvantaged workers. It would also extend until 2010 tax rules that allow businesses to combine as much as $112,000 in expenses into one annual tax deduction.

In the days surrounding the cloture vote, a large number of amendments were filed to the bill.

Senate ends debate on wage bill; clears it for floor vote
On January 30, 2007, the Senate voted to invoke cloture on S.Amdt. 100, a version of H.R. 2 which included tax breaks directed at small businesses. The vote was 88-8.



The tax breaks included in the measure were estimated to cost the federal government $8.3 billion over 10 years. Specifically, tax breaks would be extended which allow small businesses to deduct up to $112,000 on their taxes for new investments each year. The bill would also reduce the depreciation period for improvements to retail sites and extend an existing tax credit for businesses that hire disadvantaged or low-income employees.

To help fund the tax breaks, corporations would be barred from deducting the cost of jury verdicts or settlements in liability suits against them. In addition, their executives' tax-deferred pay packages would be capped at $1 million/yr.

Because the House version included only a minimum wage increase, without tax breaks, passage of this version would require negotiations in a conference committee to settle the differences.

Senate passes wage bill with tax breaks
On February 1, 2007, the Senate passed the wage bill (H.R. 2) with amendments by a 94-3 vote. The amendments added several tax cuts for small business (discussed above). Following the vote, Sen. Sherrod Brown (D-Ohio) stated, "MLK (Martin Luther King) said equality means dignity and dignity demands a paycheck that lasts throughout the week...This is a small down payment on social justice." Senate Minority Leader Mitch McConnell (R-Ky.) praised the chamber's ability to work together in a bipartisan fashion. He stated, "This is a testament to what we can accomplish when we work together to move critical legislation forward...We look forward to working with the House of Representatives to send a final bill to the President that will be a victory for both those who earn the minimum wage and those who pay it."



Bill passage and new wage increases
On May 25, 2007, President George W. Bush signed H.R. 2206 into law. The minimum wage increase had previously been added into H.R. 2206, an Iraq war and Katrina relief spending bill.



The bill will create the following wage increases:
 * June 24, 2007: $5.85 an hour
 * June 24, 2008: $6.55 an hour
 * June 24, 2009: $7.25 an hour

109th Congress
On July 29, 2006, the House passed a bill increasing the minimum wage to $7.25 by a vote of 230-180. The bill, however, was opposed by most Democrats because it included substantial cuts to the estate tax. In addition, the bill would have revived a host of expired tax cuts, including a business research and development credit and deductions for state sales taxes, college tuition and teachers’ classroom supplies.

On August 3, 2006, the Senate rejected the bill, 56-42. While the bill received a majority of votes, it fell short of the necessary 60 to cut off debate and bring it to the floor. Following the vote, Sen. Ted Kennedy (D-Mass.) said, “This Republican plan was cynical, it was contemptible, and it was cowardly.” AFL-CIO President John Sweeney said the vote “told the Republican leadership in no uncertain terms to stop playing games with the minimum wage.”

106th Congress
In 2000, both the Senate and the House passed legislation to increase the minimum wage. Both bills called for an increase in the minimum wage in multiple steps from $5.15 to $6.15 an hour by April 1, 2001. The Senate version (H.R. 833) dealt directly with increasing the minimum wage. The House version (H.R. 3081) was a massive bill and contained provisions to increase the minimum wage, as well as tax breaks and other provisions unrelated to the FLSA. Ultimately, the two chambers could not settle their differences and no bill was ever sent to President Bill Clinton.

* One Republican member voted "present."

104th Congress
On August 2, 1996, both the House and Senate passed a bill (H.R.3448) affecting the minimum wage law, airline tax and various tax breaks. The federal minimum wage was increased from $4.25 in two stages. The first increase of $.50 was implemented on October 1, 1996 (making it $4.75). The second increase of $.40 was implemented on September 1, 1997 (making it $5.15).

Eligibility for the federal minimum wage
Not all employees in the U.S. are guaranteed the federal minimum wage. It applies to employees of enterprises that do at least $500,000 in business a year, employees of smaller firms if the employees are engaged in interstate commerce or in the production of goods for commerce. In addition, it also applies to employees of federal, state or local government agencies, hospitals and schools.

The following exceptions exist to the federal minimum wage (as of January 2007):


 * If you are under 20 years of age, you may be paid as little as $4.25 per hour during your first 90 consecutive calendar days of employment.


 * Certain full-time students, student learners, apprentices, and workers with disabilities may be paid less than the minimum wage under special certificates issued by the Department of Labor.


 * Employers who allow workers to keep tips must pay a cash minimum wage of at least $2.13 per hour if they claim a "tip credit" against their federal minimum wage obligation of $5.15 per hour.

Minimum wage in the states
The following lists the minimum wage in each state as of January 2007. As stated above, in states where the wage differs from the federal wage, the higher wage takes precedence.

Minimum wage increase proposals in states, 2007
Alaska


 * Rep. Les Gara proposed HB 42, which would set Alaska's minimum wage at the higher amount of $8 an hour with annual inflation adjustments or $1 above the federal minimum wage.

California


 * Assemblyman Mervyn Dymally proposed AB 71, which would annually automatically adjust the state's minimum wage according to an inflation adjustment.

Connecticut


 * Rep. Tim O'Brien proposed HB 6298, which would create the following minimum wages: $8.65 in 2008, $9.65 in 2009, $10.65 in 2010, and $11.65 in 2011. Rep. O'Brien also proposed HB 6299, which would set Connecticut's minimum wage at 20% above the federal minimum wage.

Georgia


 * State Sen. Robert Brown proposed SB 13, which would set Georgia's minimum wage in 2008 at $7.25 and automatically adjust future minimum wages according to changes in the Consumer Price Index.

Hawaii


 * Rep. Alex Sonson proposed HB 1690, increasing Hawaii's minimum wage to $7.75 in 2007 with future year changes to the minimum wage tied to the Consumer Price Index. A similar proposal (SB 1958) was introduced by Sen. Colleen Hanabusa.

Idaho


 * In February 2007, the Idaho House of Representatives passed a symbolic bill (HB 113) that would have no actual impact on wages, but would set the Idaho minimum wage at the same amount as the federal minimum wage.

Indiana


 * SB 25, introduced by Sen. Anita Browser, would increase the Indiana minimum wage to $7.25 in 2007.
 * HB 1064, introduced by Rep. Joe Micon, would increase the 2007 minimum wage to $6.25 followed by an increase to $7.25 in 2008 with subsequent changes tied to the Consumer Price Index. It would also eliminate training wages that are below the minimum wage.
 * S.B. 52, introduced by Sen. John Broden, would increase Indiana's minimum wage in 2007 to $6.20 with an increase in 2008 to $7.25.
 * S.B. 249, introduced by Sen. Frank Mrvan, would increase Indiana's minimum wage to $6.15 in 2007 and then to $7.15 in 2008.
 * H.B. 1027 would increase Indiana's minimum wage to $6.00 in 2007 with increases to $6.75 on March 1, 2008 and to $7.50 on September 1, 2008.

Iowa


 * Iowa passed and the governor signed into law HF 1, introduced by Rep. Kevin McCarthy, that increased the minimum wage to $6.20 with a further increase to $7.25 as of January 1, 2008.

Kansas


 * H.B. 2061, introduced by Rep. Ted Powers, would increase the Kansas minimum wage to $7.25.
 * H.B. 2366, written by the Committee on Economic Development and Tourism, also proposed an increase to $7.25, and stipulated that future changes in the minimum wage be tied to changes in the Consumer Price Index.

Kentucky


 * State Rep. J.R. Gray's (D-Benton) bill raising the minimum wage in 2007 to $5.85, then to $6.55 on 7/1/08, then to $7.25 on 7/1/09, passed the Kentucky House on February 21, 2007 by a vote of 89-10. Earlier language providing for permanent COLAs was not retained in the version of the bill that passed in the House.

Maryland


 * On May 9, 2007, Gov. Martin O'Malley (D) signed a bill instituting a "living wage" throughout the state. Specifically, it required state contractors to pay at least $8.50 per hour, and $11.30 in urban areas (which are more expensive).

Michigan


 * Rep. Paul Condino introduced HB 4229 that would annually adjust the minimum wage according to changes in the consumer price index.

Minnesota


 * Rep. Joe Mullery introduced HF 91 that proposed increasing Minnesota's minimum wage to $7.95 in 2007, with changes in the future linked to changes in the Consumer Price Index.
 * HF 456, introduced by Rep. Tom Rukavina, would increase the minimum wage to $6.75 in 2007 and then to $7.75 in 1008.

Mississippi


 * Sen. Johnnie Walls has proposed SB243, calling for increasing the minimum wage in Mississippi to $8.
 * Sen. Glira Williamson has proposed SB 2088, which would increase the minimum wage to the greater amount of $6.50 or the federal minimum wage plus $1.
 * Rep. Walter Robinson has proposed HB 574 to increase the minimum wage to $7.50 in 2007 and then to $8.00 in 2008.
 * Rep. Harvey Moss proposed HB 1478 to have a statewide referendum to increase the minimum wage to $6.25, followed six months later by an increase to $7.25 with subsequent changes tied to changes in the Consumer Price Index. This bill was killed in committee.
 * Sen. Willie Simmons proposed SB 2439 to increase the minimum wage to $6.00, $6.50 in 2009 and $7.00 in 2010.

Missouri


 * Rep. John Bowman has introduced HB 1443 to set the minimum wage at $6.50.

Nebraska


 * L 31, introduced by Sen. Danielle Nantkes, proposed increasing the minimum wage to $5.52 on October 1, 2007, then to $5.89 on October 1, 2008, then to $6.26 on October 1, 2009, and then adjust it beginning on October 1, 2010 according to changes in the Consumer Price Index. The minimum wage would be changed every three years afterwards according to changes in the Consumer Price Index.

New Hampshire


 * Rep. Marjorie Smith introduced HB 514 that sought to increase the minimum wage to $6.50 on September 1, 2007 and then to $7.25 on September 1, 2008.

New Mexico


 * Sen. Ben Altamiron introduced SB 324 that would increase the minimum wage to $6.50 and then to %7.50 in 2009. It would also preserve current local minimum wage increases but would prohibit subsequent local minimum wage increases.

North Dakota


 * HB 1337, introduced by Rep. Steve Zaiser, sought to increase the minimum wage to $7.25 and beginning in 2009, to adjust annually according to changes in the Consumer Price Index.
 * HB 1454, introduced by Rep. Mark Owens, would increase the minimum wage to $6.15 in 2008 and then to $7.00 in 2009.

Oklahoma


 * SB 418, introduced by Sen. Tom Adelson, would increase the minimum wage to the higher of $6.65 or the federal minimum wage.
 * HB 2126 would increase the minimum wage to $6.50 and then to $7.15 in 2008, followed by annual adjustments according to changes in the Consumer Price Index.
 * HB 2027, introduced by Rep. Mike Shelton, would increase the minimum wage to $6.50 with annual changes beginning in 2008 according to changes in the Consumer Price Index.
 * HB 2028, also introduced by Rep. Mike Shelton, would increase the minimum wage to $6.50 and afterwards would be the higher of $6.50 or the federal minimum wage.

Pennsylvania


 * Rep. Mark B. Cohen (D, Philadelphia) introduced legislation to raise Pennsylvania's minimum wage to $8.15 in 2008, $8.75 in 2009, and $9.35 in 2010, with a cost of living increase based on the Philadelphia-New Jersey-Delaware-Maryland statistical area every year thereafter.

Rhode Island


 * Rep. Charlene Lima introduced HB 5332 that would increase the minimum wage to $7.75 in 2008, then to $8.00 in 2009, and afterwards would adjust according to changes in the inflation rate.
 * SB 52, introduced by Sen. Leonidas Raptakis, would annually change the minimum wage according to changes in the Consumer Price Index beginning in 2008, with no annual increase to be greater than 3%.

South Carolina


 * HB 3163, introduced by Rep. Bakari Sellers, would increase the minimum wage to $7 or the federal minimum wage, whichever is the greater number.

South Dakota


 * SB 207 was passed in early in 2007. It had been introduced at the request of the governor and will increase the minimum wage to $7.25.

Tennessee


 * Bills HB 23, HB 62, and SB 155 would all set the minimum wage at $6.15.

Texas


 * Rep. Garnet Coleman proposed HB 262, which sought to increase the minimum wage to $6.65 on September 1, 2007 and then to $7.65 on September 1, 2008, followed by annual adjustments according to changes in the Consumer Price Index.
 * Rep. Norma Chavez has proposed HB 49, which would increase the minimum wage to $6.25 on September 1, 2007 and then to $7.25 on September 1, 2007.
 * Sen. Rodney Ellis proposed SB 95 and Rep. Senfronia Thompson proposed HB 451, both of which would increase the minimum wage to $6.15 on September 1, 2007, then to $7.15 on September 1, 2008, and then annually adjust it according to the Consumer Price Index.
 * Rep. Roberto Alonzo proposed HB 236, which would increase the minimum wage to $6.15 an hour.
 * Rep. Ryan Guillen proposed HB 193 to increase the minimum wage to $6.00.
 * Rep. David Leibowitz proposed HB 327, which would increase the minimum wage to $5.85 on September 1, 2007, then to $6.55 on September 1, 2008, and then to $7.25 on September 1, 2009.

Utah
 * Rep. Neil Hansen proposed HB 256, which would increase the minimum wage to $7.25 as of July 1, 2007 with subsequent annual adjustments according to the Consumer Price Index.

Virginia
 * Delegate A. Donald McEachin introduced HB 2873, which sought to increase the minimum wage to $7.25.
 * Sen. Charles Colgan proposed SB 1327, which would have increased the minimum wage to $6.50 on July 1, 2007.
 * Delegate Brian Moran proposed HB 2849, and Sen. Mary Whipple proposed SB 1277, each of which would increase the minimum wage to $6.15 on July 1, 2007 and then to $7.25 on July 1, 2008.
 * Delegate David Toscano introduced HB 1654, which would increase the minimum wage to $6.25 as of July 1, 2007 and then to $7.00 as of July 1, 2008.
 * Delegate Vincent Callahan introduced HB 2004, which would increase the minimum wage to $6.15 on July 1, 2007, then to $6.15 on July 1, 2008, then to $8.15 on July 1, 2009, and then would be annually adjusted according to changes in the Consumer Price Index.
 * Delegate Marshall introduced BG 1634 that would increase the minimum wage (excluding people age 18 or less) to $6.00 on July 1, 2007, then to $6.45 on July 1, 2008, and then to $7.00 on July 1, 2009.
 * Delegate Dwight Jones introduced HB 2508, which would increase the minimum wage to $5.85 as of July 1, 2007, then to $6.55 as of July 1, 2008, and then to $7.25 as of July 1, 2009.

Washington
 * Rep. Mark Miloscia introduced HB 1119, which would have the minimum wage change according to changes in the Consumer Price Index.

Northern Mariana Islands and American Samoa
As of February 2007, American Samoa's minimum wage is set by an industry committee of employers appointed by the Department of Labor. The wage, which can be below the federal minimum wage, is different for different industries:

The Commonwealth of the Northern Mariana Islands (CNMI) has been historically exempt from the federal minimum wage. Democrats in Congress first tried to apply the minimum wage to the Marianas in 1999 and a provision was included in every minimum wage bill sponsored by the party afterwards.

Related SourceWatch articles

 * U.S. budget deficit
 * U.S. Department of Labor
 * U.S. economy
 * U.S. tax cuts
 * U.S. unemployment

External resources

 * MinimumWage.com, an anti wage hike website run by the pro-business Employment Policies Institute.
 * US Code: Title 29, Chapter 8, § 206. Minimum wage, Legal Information Institute, Cornell Law School.
 * Chart: Federal Minimum Wage Rates, 1955–2006, InfoPlease.com.
 * Minimum wage in the Wikipedia.
 * "EPI Issue Guide: Minimum Wage," general minimum wage resource page by the Economic Policy Institute, a liberal economic think tank.
 * "Minimum Wage: Facts at a Glance," Economic Policy Institute.
 * "Minimum wage trends: Understanding past and contemporary research," Economic Policy Institute, October 25, 2006.
 * THOMAS page on H.R. 2

External articles

 * A Colbert Report segment on minimum wage laws in Congress, June 27, 2006.
 * Isaiah J. Poole, "Minimum Wage Gamesmanship," TomPaine.com, July 28, 2006.
 * "House approves minimum wage increase. GOP couples boost with estate tax cut, but problems foreseen in Senate," Associated Press (MSNBC), July 29, 2006.
 * Mike Hall, "House Republicans Poison Minimum Wage Increase," AFLCIO Blog, July 29, 2006.
 * "Minimum wage increase passes House. Sen. Reid decries move as attempt to 'blackmail' working class," Associated Press (CNN), July 29, 2006.
 * "Minimum Wage," Think Progress, July 31, 2006.
 * Harold Meyerson, "Minimum Wage, Maximum Gall," Washington Post, August 2, 2006.
 * "ABC, Wash. Post advanced misleading arguments against minimum-wage boost, obscured Democratic support for wage increase," Media Matters for America, August 3, 2006.
 * Mary Dalrymple, "Senate Rejects Estate, Minimum Wage Bill," Associated Press (1010 WINS), August 4, 2006.
 * "Senate rejects GOP-backed estate tax and wage hike bill. OK's legislation on pensions as session ends," Associated Press (Boston Globe), August 4, 2006: "Democrats attacked Republican tactics of coupling the minimum wage hike with a permanent cut to the inheritance tax."
 * Ian Welsh, "Money to Congressmen Buys Votes," The Agonist, August 8, 2006.
 * Jim Kuhnhenn, "Senate defeats 'poison pill' minimum wage proposal," Associated Press (San Diego Union-Tribune), January 25, 2007.
 * Mike Hall, "28 Senators Vote to Repeal Minimum Wage. 2008 Elections, Anyone?" AFL-CIO Blog, January 25, 2007.
 * Bob Geiger, "Senate GOP Leadership Tries To Eliminate Federal Minimum Wage" and "Who Wanted To Eliminate The Federal Minimum Wage?" BobGeiger Blogspot, January 25, 2007.
 * Tula Connell, "They Did What? Outrage over Senators Who Voted to Repeal the Minimum Wage," AFL-CIO Blog, January 26, 2007.
 * Rep. Silvestre Reyes (D-Tex.), "Tax breaks for small business to accompany needed minimum wage increase," February 23, 2007.
 * "Clinton signs minimum wage increase," AP by way of CNN August 20, 1996.
 * William G. Whittaker, "IB10039: The Minimum Wage: An Overview of Issues Before the 106th Congress," Congressional Research Report July 19, 2000.