This version of the bill failed to get a 60-vote supermajority in the Senate and died: 01.24.07. Another measure to raise the minimum wage was attached to a larger bill and signed into law.
The Legislation:
The Fair Minimum Wage Act of 2007 raises the federal minimum wage from its current level of $5.15 an hour to $5.85 an hour sixty days after the bill is enacted. A year later, the federal minimum increases to $6.55 an hour, and two years later it increases to $7.25 an hour. The version of the bill evaluated here does not include any business tax breaks, although the legislation ultimately enacted into law incorporates $4.8 billion in tax cuts for small businesses. Because the final minimum wage act was attached to unrelated legislation which may have influenced the votes of many legislators, we believe this vote is the best indicator of legislators’ positions on the minimum wage increase itself.
The Middle-Class Position:
The Middle Class Supports: At less than $11,000 a year for a full-time worker, the federal minimum wage is a poverty wage. It is a rate at which it is impossible for working Americans to independently pay their rent, feed their families or get needed medical care—much less save for the types of investments that make it possible to work one’s way into the middle class, like an education, a first home or the chance to start a business.
This version of the bill, without tax cuts for business, is significant because in the past ten years Congress showered businesses with hundreds of billions of dollars in tax breaks even as hardworking families earning the federal minimum wage received no raise at all, and in fact saw their paychecks eaten away by inflation.
From the Experts:
“We are morally outraged by the number of people living in poverty in the United States, and believe that now is the time to give hard-working low-wage workers a raise and take the first step toward a true living wage for America's workers… We appreciate the commitment made by the leadership of the 110th Congress to address the woefully inadequate federal minimum wage. We will continue to raise our voices on behalf of "the least of these" and proclaim that a job should keep you out of poverty, not keep you in it”— The Most Rev. Katharine Jefferts Schori, Presiding Bishop, The Episcopal Church; The Reverend Dr. Stan Hastey, Executive Director, The Alliance of Baptists; The Reverend Dr. Clifton Kirkpatrick Stated Clerk, The General Assembly of the Presbyterian Church (U.S.A.); Bishop Roy Riley, Chair, The Evangelical Lutheran Church Conference of Bishops; and one thousand other U.S. religious leaders (January 8, 2007)
“The federal minimum wage increase of 1996/97 was followed by the best low-wage labor market outcomes in decades. When that proposed increase was under discussion, opponents predicted massive job losses among those affected by the increase... Instead, the employment rates of the least advantaged workers soared to unprecedented levels, poverty rates fell to historic lows, particularly for minority populations, the least skilled workers, and single mothers. Low wages rose in step with productivity growth for the first time in almost thirty years. Note that I do not claim that the federal minimum wage increase was solely responsible for these outcomes… But Congress should take note: the 1996/97 increase complemented these conditions; it did not preclude them.” –Jared Bernstein, Economist, Economic Policy Institute (January 10, 2007)
"We all lose when American workers are underpaid. Whether as business owners or employees, women have a significant stake in providing for their families and their communities. More than a quarter of all working women hold service, production, transportation and material moving occupations, which are often subject to low pay, minimum wage earnings. The majority of women are living without a spouse. By not paying workers a living wage, we assure that a mother working hard to support her family will not be able to make ends meet." - Margot Dorfman, CEO, the U.S. Women's Chamber of Commerce (January 29, 2007)
Beyond this Bill:
The federal minimum wage will rise to $7.25 an hour by July 2009, but after that, inflation will eat away at its value unless Congress acts to raise it again. In the past, relying on sporadic legislation has done a poor job of maintaining the value of the minimum wage over time. One simple fix would be to index the minimum wage to inflation. This would provide for automatic increases, so that the minimum will always support a consistent standard of living that enables Americans to work their way into the middle class.
Our researchers and writers continually analyze how congressional actions affect middle-class households and which members of Congress deserve a “thumbs up” for their vote. Support the people working to keep you informed.
Injustice Index Facts
Proportion of small business owners who say a ten percent minimum wage increase would have a positive effect, or no effect at all, on their company: 4 out of 5
Full-time minimum wage pay before the increase went into effect: $10,712
Average pay of CEOs at the 500 largest U.S.-based companies in 2006: $15,200,000
Rate the minimum wage would be, if it had risen as fast as CEO pay since 1990: $22.61
Percentage of Americans who support raising the minimum wage: 80
Estimated number of American workers who would see their wages increase as a result of this legislation: 13,000,000
The Discussion on DMIBlog
What do the US Women's Chamber of Commerce, the CEOs of Costco, Addus Healthcare, and ABC Home, and small business owners across the country have in common?
Search our analyses of legislation
significant to America’s current and
aspiring middle class, and find out
how members of Congress voted on
those bills.
By Keyword
By Legislator
By Bill
Issues
THEMIDDLECLASS.ORG
TheMiddleClass.org keeps you informed on what your representatives in Congress are doing that affects the current and aspiring middle class and gives you the facts you need to hold them accountable. Read More
