Minimum Wage Hike: Will It Ever Get Done?
The U.S. Senate is almost through debating a bill to raise to the minimum wage. However--Republicans want to amend the bill with provisions including tax breaks for businesses in order to offset the costs of a higher minimum wage. Democrats don't want that. There's also a move to attach tax deferred compensation to the measure. TheHouse passed the bill earlier this month--without those amendments--and Democrats in the Senate want the same. Will it happen?
Sen. Charles Grassley (R-IA) is a ranking member of the finance committee. Sen. Ron Wyden (D-OR) also serves on the same committee. Both were on "Power Lunch." Grassley says the amendments for small businesses are important to offset the costs of a wage hike. He pointed to the Clinton Administration when it raised the minimum wage--and included tax benefits for small businesses. Critics claim the hike in the wage will cause businesses to lay off or stop hiring new workers.
Wyden says he would prefer a "clean bill" without any tax breaks--but would instead like to revisit the issue after the bill is passed. He says he would like a fair flat tax for everyone. He says that it's time to help workers--who haven't seen a wage increase in ten years--especially as medical costs have increased 40% since then.
Both commented on the CEO compensation bill the Democrats are considering--and President Bush mentioned in his speech today in New York City. Grassley agreed with the president in that government can't control exec salaries--and that with more transparency and stockholder power--that should have an effect on spiraling exec compensation packages. Wyden said that it's important to target only those execs who my be engaging in questionable practices--and not hit middle manages who are on their way up--as some critics claim the compensation bill hurts.
The Senate Finance Committee is considering a proposal to sharply limit the earnings corporate executives and other highly paid employees can place tax-free into deferred compensation plans--one of the most popular executive benefits in corporate America.
As to whether the wage hike bill will pass the Senate--both men said there needs to be some compromise-but didn't say what that would be. For his part--President Bush said he would sign the bill if the tax amendments are included.
FY- The current minimum wage is $5.15 an hour. The proposed bill would raise the wage to $7.25 an hour by 2009. The last wage hike was in 1997. The number of workers affected would be 5.6 million. The CEO's pay to minimum wage rate was 821 times in 2005. In 1978--it was 78 times.