Minimum wage hits speed bump in the Senate
As part of its First 100 Hours Agenda, a bill to increase the federal minimum wage by $2.10 sailed through the U.S. House of Representatives. The a "no-strings-attached" bill (H.R. 2) passed overwhelmingly, 315 to 116 with 82 Republicans voting for the measure.
As expected, it met resistance in the Senate. Republicans (including the President) want to add tax breaks and other benefits for small businesses they say will be affected by the bill. Last week, Senate Republicans filibustered the bill. A motion to force cloture and put it to a vote failed to reach the required 3/5 majority, 54 to 43 with 3 not voting.
Senators from around the South who voted to end the filibuster were Byrd (D-WV), Landrieu (D-LA), Lincoln (D-AR), Nelson (D-FL), Pryor (D-AR), Rockefeller (D-WV), and Warner (R-VA).
(Sen. Warner was joined by four other Republicans: Coleman (R-MN), Collins (R-ME), Snowe (R-ME), and Specter (R-PA).)
Senators from around the South who voted against ending the filibuster were Alexander (R-TN), Bunning (R-KY), Burr (R-NC), Chambliss (R-GA), Cochran (R-MS), Corker (R-TN), Cornyn (R-TX), DeMint (R-SC), Dole (R-NC), Graham (R-SC), Hutchison (R-TX), Isakson (R-GA), Lott (R-MS), Martinez (R-FL), McConnell (R-KY), Murkowski (R-AK), Sessions (R-AL), Shelby (R-AL), Stevens (R-AK), Vitter (R-LA).
According to the Bureau of Labor Statistics (2005 data), there are 1,882,000 people making minimum wage. Of those, 743,000 (39.4%) are in the South.
The Senate is expected to take up the minimum wage bill again today. Although the bill being considered amends the "Fair Labor Standards Act of 1938", Republicans and lobbyists propose to tack on unrelated amendments to offset the increased costs to small business.
The National Federation of Independent Business, a lobbying and trade organization which is said to represent some 600,000 small businesses (they do not publish their membership statistics) has aggressively fought minimum wage increases at the state level, and is now lobbying against it in Congress.
Among their "talking points", the NFIB proposes to keep the increased Section 179 accelerated depreciation limit (the so-called "SUV loophole") which is set to expire in 2009, keep the accelerated 15 year depreciation schedule for restaurant construction (instead of the standard 39 years), increase the number of small businesses who can qualify for the cash v. accrual method of accounting, and eliminate the Federal Unemployment Insurance surtax.
The Senate is considering the Section 179 and restaurant depreciation tax breaks, and extending tax credits to businesses who hire disadvantaged or low-income workers. To offset the tax breaks and make them revenue neutral, they propose to tack on amendments for a $1 million cap on tax-deferred income for corporate executives and ending business deduction for court settlements, jury verdicts and fines.
What all of this has to do with the "Fair Labor Standards Act of 1938" isn't exactly clear, which is probably what prompted Sen. Ted Kennedy's widely blogged outburst from the Senate floor.
According to the AP article cited above:
But here are some facts (again from the Bureau of Labor Statistics):
According to the Small Business Administration (and assuming I am reading all of this correctly), there are approx. 25 million small businesses in the United States. Those with employees have 115 million workers, meaning that only 1.6% of small business employees would be affected by an increase in the federal minimum wage.
According to the SBA, the annual payroll for small businesses totals $4.2 trillion. Assuming all 1.8 million workers making minimum wage work a full 40 hours per week, the total impact of a $2.10 per hour increase would be $8.2 billion annually, which is less than 1% (0.19%) of the current total payroll.
And while it's true that a majority of those making minimum wage work in restaurant food prep/serving jobs (60.1%), Total receipts in the "accommodation & food services" industry are approx. $447 billion according to the SBA. Assuming all food prep/serving employees work full time, the impact would only be 1.1% of receipts. This translates to a five cent increase in the cost of a Big Mac Value Meal.
The Clinton administration learned that in dealing with an opposing majority in Congress he had to give something to get something. It's not clear in this case, though, how giving tax breaks to 25 million small businesses in return for a $2.10 per hour wage increase that affects only 1.8 million workers is such a great deal.
And contrary to what the NFIB would have you believe, not all business people oppose increasing the minimum wage. The Business for a Fair Minimum Wage coalition says:
UPDATE: As I was writing this, the Senate voted 87 to 10 to end the filibuster and put the minimum wage bill to a vote later in the week, with the aforementioned amendments. Some Democrats still want a "no-strings-attached" bill, citing a Constitutional requirement that tax related measures must originate in the House.
As expected, it met resistance in the Senate. Republicans (including the President) want to add tax breaks and other benefits for small businesses they say will be affected by the bill. Last week, Senate Republicans filibustered the bill. A motion to force cloture and put it to a vote failed to reach the required 3/5 majority, 54 to 43 with 3 not voting.
Senators from around the South who voted to end the filibuster were Byrd (D-WV), Landrieu (D-LA), Lincoln (D-AR), Nelson (D-FL), Pryor (D-AR), Rockefeller (D-WV), and Warner (R-VA).
(Sen. Warner was joined by four other Republicans: Coleman (R-MN), Collins (R-ME), Snowe (R-ME), and Specter (R-PA).)
Senators from around the South who voted against ending the filibuster were Alexander (R-TN), Bunning (R-KY), Burr (R-NC), Chambliss (R-GA), Cochran (R-MS), Corker (R-TN), Cornyn (R-TX), DeMint (R-SC), Dole (R-NC), Graham (R-SC), Hutchison (R-TX), Isakson (R-GA), Lott (R-MS), Martinez (R-FL), McConnell (R-KY), Murkowski (R-AK), Sessions (R-AL), Shelby (R-AL), Stevens (R-AK), Vitter (R-LA).
According to the Bureau of Labor Statistics (2005 data), there are 1,882,000 people making minimum wage. Of those, 743,000 (39.4%) are in the South.
The Senate is expected to take up the minimum wage bill again today. Although the bill being considered amends the "Fair Labor Standards Act of 1938", Republicans and lobbyists propose to tack on unrelated amendments to offset the increased costs to small business.
The National Federation of Independent Business, a lobbying and trade organization which is said to represent some 600,000 small businesses (they do not publish their membership statistics) has aggressively fought minimum wage increases at the state level, and is now lobbying against it in Congress.
Among their "talking points", the NFIB proposes to keep the increased Section 179 accelerated depreciation limit (the so-called "SUV loophole") which is set to expire in 2009, keep the accelerated 15 year depreciation schedule for restaurant construction (instead of the standard 39 years), increase the number of small businesses who can qualify for the cash v. accrual method of accounting, and eliminate the Federal Unemployment Insurance surtax.
The Senate is considering the Section 179 and restaurant depreciation tax breaks, and extending tax credits to businesses who hire disadvantaged or low-income workers. To offset the tax breaks and make them revenue neutral, they propose to tack on amendments for a $1 million cap on tax-deferred income for corporate executives and ending business deduction for court settlements, jury verdicts and fines.
What all of this has to do with the "Fair Labor Standards Act of 1938" isn't exactly clear, which is probably what prompted Sen. Ted Kennedy's widely blogged outburst from the Senate floor.
According to the AP article cited above:
In the Senate, Republican critics of the legislation have argued that raising the minimum wage might force some businesses to stop hiring entry level employees. They also contend that beneficiaries of a higher minimum wage likely will be teenagers working part-time jobs, not the working poor. But few if any Republicans have protested the revenue provisions in the tax package.In addition to the "teenagers" argument, other arguments around the conservative blogs include "they all work in the restaurant business as waiters or waitresses and they make good tips," or "many of them are housewives working part-time whose husbands make a good living," or "they just need to get an education to better themselves."
But here are some facts (again from the Bureau of Labor Statistics):
- 46.7% of minimum wage earners are 25 or older.
- Twice as many women as men make minimum wage.
- There are 922,000 single or divorced women making minimum wage.
- 634,000 minimum wage earners work 35 hours or more per week.
- 448,000 minimum wage earners work full time (40 or more hours per week).
- There are 772,000 people with post-secondary education (some college, an associates degree, or a college degree) making minimum wage.
- Only 8.6% of hourly workers work in food prep/serving jobs.
- 72,000 minimum wage workers are in management/professional jobs.
- 240,000 minimum wage workers are in sales/office jobs.
- 128,000 minimum wage workers are in production/transportation/materials handling jobs.
According to the Small Business Administration (and assuming I am reading all of this correctly), there are approx. 25 million small businesses in the United States. Those with employees have 115 million workers, meaning that only 1.6% of small business employees would be affected by an increase in the federal minimum wage.
According to the SBA, the annual payroll for small businesses totals $4.2 trillion. Assuming all 1.8 million workers making minimum wage work a full 40 hours per week, the total impact of a $2.10 per hour increase would be $8.2 billion annually, which is less than 1% (0.19%) of the current total payroll.
And while it's true that a majority of those making minimum wage work in restaurant food prep/serving jobs (60.1%), Total receipts in the "accommodation & food services" industry are approx. $447 billion according to the SBA. Assuming all food prep/serving employees work full time, the impact would only be 1.1% of receipts. This translates to a five cent increase in the cost of a Big Mac Value Meal.
The Clinton administration learned that in dealing with an opposing majority in Congress he had to give something to get something. It's not clear in this case, though, how giving tax breaks to 25 million small businesses in return for a $2.10 per hour wage increase that affects only 1.8 million workers is such a great deal.
And contrary to what the NFIB would have you believe, not all business people oppose increasing the minimum wage. The Business for a Fair Minimum Wage coalition says:
While the Congress debates the issue, states that have led the way by raising their minimum wages above the current $5.15 minimum wage have had better employment and small business trends than states that have not.Raising the minimum wage clearly won't solve the problem of poverty in America, but it is one small step among many and could help hundreds of thousands struggling to get by. Isn't that worth paying a nickel more for a Big Mac Value Meal?
"Congress should know the facts are very clear versus the misinformation that's been spread over the years," said Adnan Durrani, President of Condor Ventures, an investment banking firm that specializes in technology and consumer product companies. "It is a sound business decision to increase the minimum wage." Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality, customer satisfaction and company reputation.
Jim Sinegal, CEO of Costco, the nation's largest wholesale club operator with 49 million cardholders, has signed the statement in support of raising the minimum wage. Sinegal said, "The increase in the minimum wage is long overdue. I hope Congress and the President will move swiftly to enact sensible legislation that will demonstrate our nation's commitment to reward hard work."
Margot Dorfman, CEO of the U.S. Women's Chamber of Commerce, said, "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."
UPDATE: As I was writing this, the Senate voted 87 to 10 to end the filibuster and put the minimum wage bill to a vote later in the week, with the aforementioned amendments. Some Democrats still want a "no-strings-attached" bill, citing a Constitutional requirement that tax related measures must originate in the House.