WASHINGTON The U.S. House of Representatives voted Wednesday to raise the federal minimum wage from $5.15 an hour to $7.25 over a period of 26 months.
The bill, passed by a vote of 315 to 116, would mark the first federally mandated hourly wage hike in a decade.
Industry leaders had opposed the measure, urging Congress instead to let the marketplace determine the wage. They also argued that if the wage floor must be raised, the measure should contain some business-friendly provisions to help offset the added costs.
While the House measure did not include provisions of that sort, a companion bill in the Senate is expected to include such offsets as an extension of the Work Opportunity Tax Credit. Industry executives also are hoping the Senate initiative will include a more realistic building depreciation schedule that would allow operators to depreciate new structures over 15 years rather than the current 39 ½ years. The Senate measure is expected to be introduced shortly.
President George W. Bush has said he favors a plan that includes offsets that would help businesses cope with the higher payroll costs.
The House measure calls for the minimum wage to be raised in three increments of 70 cents each. The wage would rise to $5.85 60 days after the bill is signed into law. It then would jump to $6.55 a year later and to $7.25 one year after that.
The Economic Policy Institute estimates that about 4 percent of the American workforce, or some 5.6 million people, would benefit directly from a federal wage hike. According to the U.S. Labor Department, 479,000 workers paid by the hour earned $5.15 in 2005, the department's most recent estimate available.
Democrats had called the passage of a minimum wage increase a top legislative priority and vowed to address it within the first 100 hours of taking power in the House.
About 30 states have set their minimum wage high than the federal government's pay floor. During the last election, voters in Arizona, Colorado, Missouri, Montana, Nevada and Ohio approved ballot initiatives to increase their state's hourly rates. Voters also authorized that wages would be indexed to cost-of-living increases.
