
Congress Rejects Competing Minimum Wage Amendments
by Guest Blogger, 3/7/2005
On March 7, the Senate voted to kill two amendments to increase the minimum wage attached to the bankruptcy bill (S. 256). One offered by Sen. Ted Kennedy (D-MA), to raise the minimum wage from $5.15 to $7.25 per hour over two years, lost in a close 46–49 vote. The second, proposed by Sen. Rick Santorum (R-PA), and opposed by progressive groups, was soundly rejected 38–61. Santorum's amendment would have raised the minimum wage by $1.10 over two years to $6.25. Neither got the 60 votes needed to pass.
Santorum’s amendment had garnered little support from either party before the vote. Republican lawmakers are generally against raising the minimum wage because of the pressure it puts on businesses. Democrats were apprehensive of Santorum’s proposal because it was far more complex than a straight wage increase. The Economic Policy Institute has estimated that even though Santorum’s wage increase may have benefited up to 1.8 million workers, the detrimental effects of his plan would have far outweighed the positives. Provisions in the law would have reduced minimum wage eligibility, changed specifics on overtime rights, and overruled state standards for workers who earn tips. In other words, millions of workers would have lost protections they now have under current law.
Santorum’s proposal would have weakened protections workers now have under the Fair Labor Standards Act. Employees who work for businesses with revenues of over $500,000, as well as workers involved with interstate commerce, currently must be paid the minimum wage and overtime pay when they work more than 40 hours per week. The Santorum proposal would have eliminated these important protections and even abolished the 40-hour work week, replacing it with an 80-hour, two-week work period. This means if a worker puts in 50 hours one week, and 30 hours the next week, they would not be eligible to receive overtime pay. It would not only have lowered accepted fair labor standards, but also allowed employers to overwork their employees in busy periods and then cut their hours when business slows down, shifting control over work hours from employees to employers.
Santorum’s wage raise would also have covered less than a fifth of the number of workers who received raises in 1997 – the last time the minimum wage was increased. The Economic Policy Institute chart below shows how ineffective Santorum’s proposal would be relative to past minimum wage hikes.
Santorum’s amendment also contained a controversial provision that would have given business a waiver on first-time regulatory violations of non-compliance with paperwork requirements. See Senate Nixes New Right for Business to Restrict Information, also in this issue.
