The U.S. House Wednesday approved an increase in the federal minimum wage for the first time in nearly a decade. If the measure passes in the Senate, this would end the longest stretch without an increase in the federal minimum wage since the standard was established in 1938.
In a vote of 315-116, the House approved an increase from the current $5.15 to $7.25 an hour over the next two years. Eighty-two Republicans joined all 233 Democrats in passing the measure.
President Bush offered support for the increase of $2.10 on Dec. 20, as long as it was accompanied by tax breaks for small businesses.
“I believe we should do it in a way that does not punish the millions of small businesses that are creating most of the new jobs in our country,” Bush said in a news conference.
The tax breaks would allow these small businesses to “stay competitive and to help keep our economy growing,” he added.
Shane Reed, owner of Coldstone Creamery and Strange Brew Coffeehouse, said he is not against an increase in minimum wage but does not believe the increase should be so large.
“I guess I support it going up a little bit. Obviously, if we start having to pay people a lot more, the cost in products will start going up,” Reed said.
In order to offset negative effects, small business tax breaks would have to be included, Reed said.
“In the long run, it might hurt the minimum wage workers it’s trying to help because of the increase in prices for products,” Reed continued. “It’s a tricky situation.”
Over the past decade, inflation has depleted the value of the wage to the lowest level in more than 50 years. Someone currently working full-time for minimum wage takes home less than $11,000 dollars a year, which is below the poverty level for a parent with one child, according to the U.S. Department of Health and Human Services.
When the increase is in full effect, it will raise the yearly pay to $15,000, which is roughly the level of minimum-wage pay for 1982 when adjusted for inflation.
Starkville Ward 4 Alderman Richard Corey said the minimum wage has been increased in some places on the state level, such as California.
“It is to understanding that other states who have already increased their minimum wage have not suffered economically,” Corey said. “I think it’s time for an increase.”
Corey said other states have raised their minimum wage based on consumer price indexes, which show the “changes in the prices paid by urban consumers for a representative basket of goods and services.”
If the increase passes in the Senate, the wage will rise to $5.85 within 60 days of enactment. One year later it will rise to $6.55, and in 2009 it will reach $7.25.