Source AP ©

Congress to increase minimum wage

Congress poised Thursday to increase the federal minimum wage by $2.10 (1.56 EUR).

For years, the idea of increasing the minimum wage from $5.15 (3.83 EUR) an hour has been stalled by partisan bickering between Republicans and Democrats.

That almost became the fate of this year's proposal to raise the federal minimum wage to $7.25 (5.39 EUR) over two years. Democratic leaders attached the provision to the $120 billion (89.2 billion EUR) Iraq war spending bill, which was vetoed by the Republican-controlled White House on May 1 because of Democrats insisting on a pullout date for American troops.

But with the House and Senate ready to pass a rewritten bill, and President George W. Bush signaling his approval at a White House news conference, it seems likely that the end is near for the longest stretch without the federal pay floor rising since the minimum wage was established in 1938.

"We're very hopeful we're going to see finally that increase in the next couple of days," said Sen. Edward Kennedy, chair of the Senate Health Education Labor and Pensions Committee.

This would be the first change since the minimum wage went from $4.75 (3.53 EUR) to $5.15 (3.83 EUR) on Sept. 1, 1997 under former President Bill Clinton and the Republican-controlled Congress.

The minimum wage provisions were one part of the Iraq war spending bill that did not change: the minimum wage goes up to $5.85 (4.35 EUR) two months after Bush signs the bill, then to $6.55 (4.87 EUR) one year later and to $7.25 (5.39 EUR) the next year.

The liberal-leaning Economic Policy Institute, a research group in Washington, estimates that 5.6 million workers - or 4 percent of the work force - currently earn less than $7.25 (5.39 EUR).

"This is a great day for America's middle class," said Rep. George Miller, chair of the House Education and Labor Committee. "America's workers have been waiting for a raise for a long time."

Currently, a person working 40 hours per week at the current minimum wage of $5.15 (3.83 EUR) makes about $10,700 (7,957 EUR) a year. An increase to $7.25 (5.39 EUR) would boost that to just over $15,000 (11,154 EUR) a year.

The full increase, according to Miller, is enough to pay for 15 months of groceries for a family of three.

More than two dozen states and the District of Columbia already have minimum wages higher than the federal level. Minimum wage workers are typically young, single and female and are often black or Hispanic.

Raising the minimum wage was a key part of Democrats' midterm election platform. To help make it palatable for Republicans, they added $4.84 billion (3.6 billion EUR) in tax relief for small businesses to help them hire new workers and offset any cost associated with an increase in the minimum wage.

Republicans had complained earlier that the tax cuts in the bill were insufficient, but the inclusion of the provisions in the Iraq war spending bill made it difficult for them to stop.

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