Jan 19, 2007

House Votes To Increase Minimum WageSource: Various

The House of Representatives recently voted to increase the federal minimum wage for the first time since 1997, boosting it by $2.10 an hour to $7.25 in three phases over two years. The new rate would mean about $4,000 a year more for a minimum-wage employee working full time.

Under the bill, the minimum wage would increase from $5.15 an hour to $5.85 per hour 60 days after enactment. One year later, the wage would increase to $6.55 an hour, and a year after that, it would go to $7.25 an hour.

The legislation now moves to the Senate, where members of both parties may reach a compromise. Republicans in both the Senate and the House have proposed a series of tax incentives for small businesses that would be tied to an increase in the minimum wage. The tax incentives are intended to help offset new costs arising from the wage increase. This idea has been supported by President Bush, who has said he would agree to a minimum wage increase as long as small business incentives are added to any legislation.