McClatchy News Service

WASHINGTON – With House Republicans poised to back an increase in the federal minimum wage, labor unions were voicing support for the effort while some businesses were arguing that an increase would mean job cuts for low-skilled workers.

The minimum wage has been $5.15 since 1997. House Democrats have called for an increase to $7.25 over 30 months – a 40 percent increase for the estimated 7 million workers who work for the federal minimum.

The legislation might be tied to a package of tax breaks benefiting small businesses and others. Opponents to those additions, including many House Democrats, have said workers deserve a raise with no strings attached.

Bill Samuel, legislative director for the AFL-CIO, said an increase is long overdue and that resulting expendable income could be a stimulus for local economies.

The proposed change, he said, would directly benefit 7.3 million workers who make between $5.15 and $7.25 an hour. Seven out of 10 of those beneficiaries are adults, Samuel said, and a majority of them are women. More than one-third, he said, are the sole providers for their families.

Someone who works 40 hours a week at the current minimum wage earns $10,700 a year – below the poverty line for families of three or more. Purchasing power for minimum wage workers, Samuel said, is lower now than it has been in 50 years because of inflation.

But some say an increase is not a good idea. Mike Flynn, legislative director for the Employment Policies Institute, a think tank financed by business, said wage hikes might mean job cuts for low-skilled employees.

“What you find … is that the consequences are never what you think they’re going to be,” Flynn said.

If the minimum wage goes up, Flynn said, workers such as teens who live at home will flock to jobs now held by the working poor. Even if businesses can get by paying higher wages without job cuts, he said, the face of minimum wage is likely to change.

“The tragedy is that if you make that entry-level job so expensive to offer that they (low-skilled workers) can’t get the job in the first place, they never get the skills to move up the wage ladder,” Flynn said.

Flynn cited studies by Duke University and Cornell University that showed teens from wealthy families were attracted to minimum-wage jobs when the wage was increased, displacing low-skilled workers.

Samuel said there were no data he knew of from previous state or federal wage increases that showed any measurable job loss. A wage increase would, if anything, encourage unemployed people and welfare recipients to join the work force, Samuel said.

According to data from the AFL-CIO, 22 states have minimum wages above the federal minimum – the highest is $7.63 in Washington state, which indexes its rate based on inflation at the start of every year.

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