Doing the Minimum on Minimum Wage - 2007
Eight of ten Americans support it and hundreds of leading economists agree it would support efforts to lift 1.9 million American workers and their families out of poverty. An increase in the federal minimum wage is long overdue, so why does it take so long for Congress to approve one?
A big part of the answer is campaign contributions. Business interests opposed to hiking the minimum wage contribute heavily to political campaigns. On the rare occasions that the minimum wage is raised, they also typically demand special interest tax breaks as a payback in return for allowing the legislation to go through.
Just look at the money:
- Business interests outspent labor unions 17 to 1 in the 2006 elections.*
- Donors who reported they worked as waitresses or waiters gave $900 in the 2006 election cycle. By contrast, the restaurant industry , which includes everything from fast food to large dining chains to locally owned restaurants, and strongly opposes minimum wage hikes, reported donations of more than $ 7 million in 2006, and more than $58 million in total giving since 1989.
- In early 2007, the House of Representatives voted 315-116 to raise the federal minimum wage to $7.25 over a period of two years. The116 Representatives voting against the raise averaged $766,555 each in campaign contributions from business interests in the 2006 election cycle, while the 315 members who votes for the raise received an average of only $207,804.
The 110th Congress convened in early 2007 with a promise by Democratic leaders to raise the minimum wage. The House, as part of the "100 hours" agenda of Speaker Nancy Pelosi of California, passed a bill (H.R. 2) to raise the federal minimum wage from $5.15 to $7.25.
Next, the minimum wage debate went to the Senate where a similar bill passed 94-3, but not before it was dressed up with $8.3 billion in tax cuts for businesses. The House, in return passed a series of tax cuts on a vote of 360 to 45 that, while less extreme than the Senate's, still represented a willingness to mollify corporate interests. President George W. Bush has indicated he supports the plan to raise the minimum wage to $7.25 per hour. But he's also indicated he expects a series of tax breaks and other incentives directed towards business interests to be coupled with the raise. And business interests are signaling their opposition to the hike- the National Restaurant Association mobilized its members to call Congress and oppose the hike - and perhaps remind them of the Association's $1.3 million in individual and PAC campaign contributions in 2006.
Who Works for the Worker?
Congress last raised the federal minimum wage in 1997 to $5.15 an hour. Now, nearly a decade after this increase, minimum wage earners have the lowest buying power in history. Thanks to inflation, $5.15 today buys 30 percent less than it did in 1979. Even then, the legislation passed only because it contained a series of tax breaks for American companies that take their business overseas, a billion dollars in tax incentives for companies that engage in leveraged buyouts, a cut to pension and retirement benefit protections that disproportionately affect lower wage workers, and a series of other benefits like removing taxes on certain luxury items and higher-end pension withdrawals designed to benefit the super-rich.
There is strong public support for an increase. In fact 20 states and the District of Columbia have established a minimum wage higher than the federal mandate. In November 2006, voters in six of those states-Arizona, Colorado, Missouri, Montana, Ohio, and Nevada-all approved minimum wage increases. But every time there has been a serious attempt in Congress to raise the minimum wage, it's been beaten back by the special interests that oppose it-groups such as Chamber of Commerce, the National Association of Manufacturers, and the restaurant and hotel industries. These interests give millions to political campaigns.
In 2006 the Republican leadership in the House and Senate responded to calls to raise the minimum wage by attempting to tie it to a reduction of the estate tax - another boon for the super-wealthy - and another $38 billion in tax breaks and other pork-barrel federal spending to sweeten the pot. "This trifecta is a high-stakes gamble with America's future," said Senator Richard J. Durbin of Illinois, the Senate's Assistant Majority Leader. "This is the worst special-interest bill I have seen in my time in Congress."
The conflict between acting in the best interests of constituents, and appeasing powerful campaign contributors has stalled a popular and much-needed increase in the federal minimum wage for too long. To address this and other pressing public policy concerns, we must address the way in which elections are financed in this country and work to end the influence of special interest money on our elected officials and our laws.
About Clean Elections
Full public financing of elections, or Clean Elections, already is law in Maine, Arizona, New Mexico, North Carolina, New Jersey, Vermont, and Connecticut cuts the ties between special interest money and public policy by allowing candidates to run for office without seeking large contributions from an elite and wealthy few. Instead, candidates are asked to demonstrate broad public support by gathering a number of small dollar contributions (usually $5) from voters and agreeing to abide by spending limits and forgo further private contributions. In return they receive a grant from the state to run their campaign, and if they are elected they head to the statehouse accountable primarily to the voters who elected them, not the special interests who would have financed their campaign.
Clean Elections creates greater diversity in the candidate pool, allowing people from a variety of backgrounds, who might not otherwise have had the resources to run, to seek office and pursue policy solutions to the problems facing ordinary Americans.
If you want to see the minimum wage go up, and with it the prospects for millions of American workers and the families they support, don't rely on legislators indebted to CEOs and other wealthy business interests - instead, work to pass Clean Elections in your state and at the national level to ensure that people like you can run for office and create a government responsive to the needs of its citizens.
*All contribution data come from www.opensecrets.org, and include contributions of $200+ to federal candidates and parties.
 CBS/New York Times poll; July 21st-25th 2006. P=1,127. MOE +/- 3%
 Raising the National Minimum Wage: Information, Opinion, Research
 U.S. Department of Labor; Bureau of Labor Statistics "Characteristics of Minimum Wage Workers: 2005"
 Analysis by Public Campaign of U.S. Federal Election Commission (FEC) data coded by industry by the Center for Responsive Politics (www.opensecrets.org). Includes contributions from individuals ($200+) and Political Action Committees (PACs) to federal campaigns.]
 AFL-CIO "America Needs a Raise" February 1, 2007.
 Montgomery, Lori "House Advances Minimum Wage Hike" The Washington Post. February 17, 2007.
 Economic Policy Institute" Minimum Wage Issue Guide: FAQs" November 2006
Hulse, Carl Washington Post August 3, 2006