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Wednesday, 27 September 2006 00:00

Minimum wage battle in Congress marked by politics

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When Congress proposed raising the minimum wage from $5.15 to $7.25 an hour this summer, the resulting vote epitomized the mixed-up world of Washington politics.

 

Democrats, who generally support the wage hike, voted against it. Republicans, who are generally against it, voted for it.

The reason: a permanent repeal of the estate tax was attached to the bill. Democrats believe the tax cut would benefit the wealthy, exempting the fortunes of people like Bill Gates and Warren Buffet from being taxed when they die. They weren’t willing to compromise, even if it meant securing a minimum wage hike they otherwise wanted.

Republicans believe the estate tax unfairly taxes inheritances, including farms and small businesses passed down to heirs. They were willing to grant a minimum wage hike they didn’t really support to get rid of this egregious tax.

For the record, the bill failed. Both sides accused the other of election-time pandering.

“Any claim that someone was supporting the minimum wage increase by supporting that bill was disingenuous and a political stunt for an election year and nothing more,” said Schorr Johnson, communications director of the N.C. Democratic Party. “I think the American people saw right through that. It was very disingenuous.”

Figuring out where U.S. Rep. Charles Taylor, R-Brevard, stands on a minimum wage hike is a bit confusing. He has voted against minimum wage increases four times in the past decade. But he has also voted for bills that contain a minimum wage increase.

To simplify matters, Congress should hold a straight up or down vote on the issue, according to Melissa Fridlin with the Working Families Win campaign to mobilize low-income working families to vote.

“Attaching anything to it really muddies the waters and makes it confusing for people. We want to know where our Congress people actually stand on the minimum wage,” said Fridlin.

A stand-alone bill to raise the minimum wage was proposed in July, but was blocked by Republicans. Taylor was among those who blocked the bill, drawing a sharp response from Shuler.

“Charles Taylor’s repeated opposition to increasing the federal minimum wage is hurting working families,” Shuler said in an issued statement. “The fact that any American working full-time can still live in poverty is absolutely wrong. Due to Charles Taylor’s stubborn refusal to raise the minimum wage that very thing is occurring all over this district, this state, and this nation right now.”

When the bill resurfaced a month later — this time coupled with a repeal of the estate tax — Taylor voted for it.

“I believe tax incentives for small business owners in WNC — who continue to drive new job creation as well as economic expansions — should go hand-in-hand with minimum wage increases,” Taylor said in a written statement. “Working families in WNC deserve a fair wage for a fair day’s labor — just as the business owners who employ them deserve fair treatment from our nation’s tax policies.”

In the past, Taylor has come out unequivocally against the minimum wage, however. In a June questionnaire in the Asheville Citizen-Times, Taylor responded this way when asked whether the minimum wage should be raised: “No. The federal government cannot legislate prosperity — otherwise we should mandate a minimum wage of $50 an hour. The prevailing wage in WNC is already far above the federal minimum.”

Those opposed to a minimum wage increase argue that it would do little for the economy. For starters, it could hurt small businesses, according to Daren Bakst, an analyst with the John Locke Foundation, a conservative think tank based in Raleigh.

“It’s not the McDonalds of the world we’re worried about or the Wal-Marts,” said Bakst. “The problem is the mom and pop shops. They can’t compete at those higher rates.”

Bakst also argues that a mandated increase in the minimum wage will cause minimum wage jobs to dry up.

“Wages represent how much value an employer places on an employee. If you ask me to pay $7 an hour for something I value at $5.15 an hour, I’m not going to do it,” Bakst said. “They won’t employee as many people.”

Taylor made a similar argument in 1999 in a statement that appeared in the Asheville Citizen-Times.

“Small businessmen throughout Western North Carolina tell me that they are paying 10, 20 or 30 percent more than the minimum wage for unskilled workers,” Taylor said. “The last thing the American economy needs is for the government to impose another artificial barrier to people entering the work force.”

Bakst said the government should not set a minimum wage at all but instead let market forces dictate what people are paid.

On the flip side, the minimum wage was a victory driven by labor unions that put an end to sweat shops of the Industrial Revolution.

The federal minimum wage has not been raised for nine years. In the meantime, Congress has awarded itself several pay increases totaling more than $30,000.

“That is absolutely shameful,” Johnson said. “Here in North Carolina we are not waiting on the do-nothing Republicans in Congress.

This summer, the state of North Carolina increased the minimum wage from $5.15 to $6.15 an hour. The new wage will take effect Jan. 1, 2007.

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