Atlanta, GA, July 24, 2009 – The federal minimum wage increased today, raising wages of the lowest paid workers from $6.55/hour to $7.25/hour and providing a real boost to working families and the economy. Workers who benefit from the increase will spend it in their local communities on much needed items like milk, diapers and clothes for their children.

Marilynn Winn, is a temp worker in Atlanta earning $6.75/hour at an auto auction. “Increasing the minimum wage will help me and everyone in my community,” she says. “I help my 77 year old mother and 18 year old grandson when I can. Sometimes my mother calls asking for help to buy food and I have to say, “I can’t this week.”

Such basic needs might not sound like the elements of an economic recovery package. But according to the Economic Policy Institute, this $24 per week increase for full-time minimum wage workers will generate $5.5 billion in consumer spending over the next year – providing a helping hand to the sagging economy. Though Congress could not foresee our current economic troubles when a series of three wage increases were enacted in 2007, this minimum wage increase could not come at a better time – for low-wage,
working families and for the country as a whole.

When President Franklin Roosevelt first proposed the first federal minimum wage law in 1937, he noted that: “The increase in national purchasing power (is) an underlying necessity of the day.”

Thirty –one states will be affected by the minimum wage increase, including Georgia and Wisconsin where 9to5 has worked in coalition with business, labor, faith, nonprofit and civil rights organizations to ensure that working families receive what Roosevelt called a “fair day’s pay for a fair day’s work.” Other states where 9to5 has launched campaigns, including Colorado and California, have a minimum wage above $7.25.

Recent economic studies document that states where the minimum wage was raised had better employment and small business growth than states that did not. A letter signed by 650 leading economists, in support of raising the minimum wage, noted “most of the beneficiaries are adults, most are female and the vast majority (come from) low-income working families.” Disputing claims that these increases threaten job growth, they state, “The increase… would not have the adverse effects that critics have claimed.”

While the federal minimum wage increase will go into effect at a time when working families are struggling mightily to make ends meet, the American worker, particularly low-wage workers, need and deserve more: guaranteed paid sick days, more affordable child care for working parents and time off to be involved in their children’s school activities.

As we celebrate this minimum wage increase and all that it promises, let’s continue to move toward family-friendly workplace legislation so that the workplace works for all of us.

Cindia Cameron: As Organizing Director for 9to5, National Association of Working Women, Ms Cameron coordinates issue campaigns, provides leadership and program development to chapters and staff across the country. She is a media spokesperson and public speaker for community and employer audiences on a range of working women’s issues, including living wages, sexual harassment, working poverty and family friendly policies. Ms Cameron has a background in adult and labor education, with a BA in Economics and Labor Studies from Rutgers University. She has worked for 9to5 since 1983.

This article originally appeared at 9 to 5 on July 23, 2009 and is reprinted here with permission from the source.

Today’s increase means a full-time minimum wage earner will receive $28 more a week. This raise is badly needed. It is also categorically insufficient.

While our nation’s plunge into recession has forced many working families to tighten their belts, low-wage workers have fared even worse. The decade between 1997 and 2007 was the longest period in history without a minimum wage increase–but even with this wage hike, minimum wage workers will still make less than they did in 1956, after adjusting for inflation.

In 1968, Dr. Martin Luther King said, “We are tired of working our hands off and laboring every day and not even making a wage adequate with daily basic necessities of life.” How is it possible that his statement would still ring true 40 years later? Recent raises are so little, so late that even with the increase, America’s minimum wage is still 17 percent lower than its peak in 1968. In fact, it would take $9.83 today to match the buying power of the minimum wage of 1968.

The Center for Economic and Policy Research (CEPR) estimates that some 10 million workers–those at the minimum wage or just above it–will benefit from the increase. But the facts remain that an individual earning $7.25 an hour in a standard 2,000-hour work year would earn $14,500 per year…a salary which is still slightly below the 2009 federal poverty level for a family of two. While corporate profits have grown steadily in the past several decades, workers are not getting . As the minimum wage fell 22% in real dollars from 1973 to 2007, corporate profits have grown steadily in the past several decades, jumping more than 50% during the same time period. Statistics like these just reinforce that sad reality that although Americans are working harder than ever, they are not reaping the fair share of the profits their labor work is creating.

Although the federal minimum wage increase from $6.55 to $7.25 an hour reflects a growing understanding that workers face enormous financial burdens, it’s not nearly enough. A NY Times editorial points out: “The latest increase will slow the decline in living standards, but it doesn’t reverse the overall downward pull.” But it doesn’t have to be this way, says SEIU’s Anna Burger:

“For millions of hardworking Americans, their only opportunity for a raise is controlled by which way the political wind blows in Washington…Congress must pass the Employee Free Choice Act, a bill that would allow workers to bargain with their employers for better job security, wages and benefits to ensure that millions more Americans have good jobs with real benefits and a pathway to the middle class.”

It’s time to break the cycle of too little, too late raises. We can’t build a strong, sustainable economy if a growing share of business revenue continues to go to executive pay and profits–we need to level the playing field. The thousands of people who have already taken action know that majority sign-up is still, bar none, the fairest way for workers to negotiate for better job security and wages.

It’s important that both the House and the Senate see how much support there is for majority sign-up and the Employee Free Choice Act–

SEIU Blog

Kate Thomas: Kate Thomas works in New Media for the Service Employees International Union.

This article was originally posted on the SEIU Blog on July 24, 2009 and is reprinted here with permission from the author.

Today, the minimum wage rises to $7.25 an hour. We should all be glad that millions of people are going to get a bit more money in their pockets. But, this hike masks a very grim fact: the “recovery” is not going to happen anytime soon, if the measure we use for “recovery” is that working Americans are going to find meaningful, full-time, decently-paid employment.

Effective July 24th, 2009 the Federal Minimum Wage will increase from its current level of $6.55 (previously $5.85) to $7.25 an hour, according to the United States Department of Labor. This amounts to an increase of 10.7%. These wage floor increases were mandated by a bill passed by Congress in 2007, when the minimum was $5.15 an hour, where it had been for many years prior. With few exceptions, almost all employers are required, under the Fair Labor StandardsAct (FLSA), to pay at least the federal minimum wage to their hourly non-exempt employees for all hours they work.

Accordingly, advocates for low-wage workers believe that a higher minimum wage is a step in the right direction, even though for many people it’s barely enough to survive on. With this new increase to $7.25 an hour, a full-time worker still only earns $15,080 a year. At the nationwide work-week average of 33 hours, the worker would earn only $12,441. The United States government sets the poverty level at $10,830 for one person or $22,050 for a family of four in 48 states and D.C. A worker who is above this low poverty level would not be eligible for certain welfare-related assistance. Thereby, the new federal minimum wage will just barely put many Americans above the poverty level, exempting them from certain assistance, yet barely allowing them to live comfortably.

While the federal minimum wage applies to all states, (click here for more information on each state’s minimum wage laws), individual states have the right to pass a higher minimum wage than the federal level. Some states will not be affected by the increase in minimum wage as they already have a minimum wage above $7.25. The impact will most be felt in 30 states (see below) where the minimum wages are lower than this rate, and many of them plan to match the federal minimum once it increases. Seven states already have laws mandating $7.25 minimum pay, while 14 states and the District of Columbia exceed the new minimum. Employers are required to pay whichever is the highest, federal or state.

Employers in the following 30 states will generally see the minimum wage they are required to pay increase to $7.25 per hour on July 24, 2009:

• Alabama
• Alaska
• Arkansas
• Delaware
• Florida
• Georgia
• Idaho
• Indiana
• Kansas
• Louisiana
• Maryland
• Minnesota
• Mississippi
• Missouri
• Montana
• Nebraska
• New Jersey
• New York
• North Carolina
• North Dakota
• Oklahoma
• Pennsylvania
• South Carolina
• South Dakota
• Tennessee
• Texas
• Utah
• Virginia
• Wisconsin (state law is not tied to federal law, so employers covered by state, but not federal law, will not be required to pay federal minimum wage.)
• Wyoming (state law is not tied to federal law, so employers covered by state, but not federal law, will not be required to pay federal minimum wage.)

In the District of Columbia, the minimum wage is automatically $1.00 per hour higher than the federal rate if that amount is greater than $7.00. Therefore, the minimum wage in the district will increase to $8.25 per hour beginning July 24, 2009.

In Nevada, the state minimum wage rate varies for employers, depending on whether the employer offers its employees health benefits, and is indexed to inflation. The increase in the federal rate on July 24^th will require Nevada employers that provide health insurance to pay their employees $7.25 per hour. Employers that do not offer qualified health insurance must pay their employees $7.55 per hour.

This year’s increase in the federal minimum wage will generally have no effect on employers in the following 19 states because they currently have minimum wages at or above $7.25 per hour:

• Arizona (the state minimum wage is $7.25 and is indexed to inflation)
• California (the state minimum wage is $8.00)
• Colorado (the minimum wage is $7.28 and is indexed to inflation)
• Connecticut (the state minimum wage is $8.00 ($8.25 on 1/1/10))
• Hawaii (the state minimum wage is $7.25)
• Illinois (the state minimum wage is $8.00 ($8.25 effective 7/1/10))
• Iowa (the state minimum wag is $7.25)
• Kentucky (the state minimum wage increased to $7.25 on July 1)
• Maine (the state minimum wage is $7.25 ($7.50 on 10/1/09))
• Massachusetts (the state minimum wage is $8.00)
• Michigan (the state minimum wage is $7.40)
• New Hampshire (the state minimum wage is $7.25)
• New Mexico (the state minimum wage is $7.50)
• Ohio (the state minimum wage is $7.30 and is indexed to inflation)
• Oregon (the state minimum wage is $8.40 and is indexed to inflation)
• Rhode Island (the state minimum wage is $7.40)
• Vermont (the state minimum wage is $8.06 and is indexed to inflation)
• Washington (the state minimum wage is $8.55 and is indexed to inflation)
• West Virginia (the state minimum wage is $7.25)

*For more information on the minimum wage laws, click here.

**For a consolidated table of state minimum wage updates effective July 1^st, 2009, click here.

Hannah Goitein: Hannah Goitein is currently a law student at the George Washington University School of Law and a legal intern for Workplace Fairness. Prior to law school, Hannah graduated magna cum laude from the Isenberg School of Management at the University of Massachusetts Amherst. Hannah previously worked for AT&T as a manager and as a manager for a restaurant before that. Through her management experience coupled with her legal and business education, Hannah became committed to helping Workplace Fairness address workers right issues and continues to be actively involved in improving the workplace. Hannah lives in Washington, DC.

The minimum wage is a scandal. It masks poverty. It must be dramatically raised.

On July 24th, the minimum wage will rise to $7.25 an hour. I applaud people who worked hard to pass the three-step hike. The new level will put some extra money in the pockets of millions of Americans and, modestly, bump up wages that hover above the minimum wage because some employers will want to keep workers they value.

But let’s be honest: the minimum wage is an American scandal. It is a wage that makes us think that we have set a reasonable floor for wages so employers do not exploit people.

But, the minimum wage IS a poverty-level wage. At the grand sum of the new $7.25 per hour, if you worked every single week, every day, you would earn $14,645 a year–with likely no health care, no retirement, no vacation days, no sick days. By comparison, the federal POVERTY LEVEL for a family of three is $17,600–a number that is outdated because it doesn’t take into account the real cost of living. But, even that number is higher than what a person would earn at the new minimum wage.

That is a scandal.

The minimum wage should be raised to $10 an hour, to be followed by additional hikes in the minimum wage so that it begins to reflect both the real cost of living and the incredible productivity of American workers that has not been reflected in their wages over the past 30 years. This is a proposal advocated by a variety of organizations, including Let Justice Roll.

Yesterday, I debated the minimum wage issue on CNBC:

What is startling to me, both from this recent debate and other discussions on the topic, is the continued lies that are spread about who “benefits” from the minimum wage and what truly contributes to a healthy economy.

Here are some facts (drawn from various sources, including the Economic Policy Institute):

Almost 10 percent of the workforce is affected by the minimum wage, either directly or indirectly (”indirectly” means that a rising minimum wage often increases wage levels just above the new minimum wage).

It isn’t true that the minimum wage is just a “starting wage” that people move out of, or that it is a wage just for teenagers working summer jobs or some other false argument. Four out of five minimum-wage workers are adults, and almost 3 in five of those are women. More than half work full-time. A quarter of minimum-wage workers have kids under the age of 18 and 1.2 million are single parents.

It also simply false to say rises in the minimum wage have a large, negative effect on jobs–meaning, that companies have to cut jobs because of the increased cost of a higher minimum wage. There is a logic here, as EPI points out:

“New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that

employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.”

But, we should only be defending the minimum wage, in my opinion, as a concept–not praising the level that it stands at. It must be far higher.

So, what is going on here?

The truth is that the scandal of the minimum wage is part of the larger picture of a decades-long robbery of the American worker. The economy that we live in thrives on the backs of people who work for poverty-level wages.

I’ve made this point before: productivity has skyrocketed over the past 30 years but wages have remained essentially flat. Some of that productivity did come from technology advances. But, most of it came because workers labored harder than ever, partly out of fear of losing a job in an economy that has forced people to pile up debt and rely on credit cards to survive.

The astounding wealth hoarded by CEOs and the top one-tenth of one percent of Americans was built up on the backs of hard labor and poverty-level wages. We do not have the slave-labor conditions seen in some other countries around the world. But, without question, the wealth of the country has been created by millions and funneled to a few.

Had the minimum wage tracked productivity over that period of time, the minimum wage should be $19 an hour.

I have also argued that the minimum wage scandal is far more important than the Bernie Madoff-type scandals. My friends, we got into the financial crisis we are in precisely because of the theft of wages of the American worker. Oh, how the free marketeers rejoiced at the decline of unions and the orgy of deregulation. But, as political leaders of both parties stood silent and were swamped by campaign cash from Wall Street and corporate interests, workers’ wages were pummeled.

And, then, what was left? An economy where people had to finance their lives through credit cards and, then, home equity–all illusions of wealth that are now gone.

So, now what? How do people like the CNBC talking heads and our political leaders, who still do not recognize wage collapse as the number one reason for our economic debacle, envision us reviving a decent standard of living for millions of people?

I say that one step is clear: a $10-an-hour minimum wage in 2010 as a small down-payment and a first step towards pushing wages back to a moral level.

Jonathan Tasini: Jonathan Tasini is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.

This article was originally posted on Working Life on July 7, 2009 and is reprinted here with permission from the author.

Over the past few weeks, I’ve explored a variety of proposals for additional federal stimulus measures. The federal government could make greater investments in repairing public infrastructure; fund the construction of affordable housing; extend tax credits to employers who increase employee health coverage; provide incentives for states to expand access to food stamps, welfare, and Medicaid; or even create a mass public jobs program. So far, none of those proposals is in the cards. But one overlooked recovery measure is already underway: the minimum wage increase scheduled for July 2009.

A new research brief from Kai Filion at the Economic Policy Institute highlights the stimulative impact of raising the minimum wage.

Remember that back in 2007, Congress obliged President Bush to sign a long-delayed minimum wage increase into law by attaching it to a must-pass war appropriations measure. After ten years in which the value of the minimum wage was continuously eroded by inflation, Congress raised the minimum from $5.15 to $5.85 an hour in 2007. In 2008, it went up to $6.55. Next month, it’s headed up to $7.25. And the economy is benefiting. So far, minimum wage increases have generated $4.9 billion in spending according to Filion, while the next increase will produce $5.5 billion in additional spending. As Filion succinctly explains “by increasing workers’ take-home pay, families gain both financial security and an increased ability to purchase goods and services, thus creating jobs for other Americans.”

The issue brief also takes on the most familiar minimum wage misconception – that raising pay inherently means increasing unemployment. Surveying a bevy of recent studies that have failed to detect significant increases in unemployment when the minimum wage rises, the issue brief considers factors like improved productivity, better employee retention and the stimulative effect of increased spending which may help explain why, in practice, jobs don’t disappear when low pay gets a mandatory boost.

The minimum wage increase all queued up and ready for July is good news, but of course there’s more policy work to be done. During the campaign President Obama pledged to seek an increase in the minimum wage to $9.50 by 2011, a measure that would provide great additional stimulus if the first steps began soon. Add that to the stimulus policy wish list.

About the Author: Amy Traub is the Director of Research at the Drum Major Institute. She received a graduate fellowship to study political science at Columbia University, where she earned her Masters degree in 2001 and completed coursework towards a Ph.D. Funded by a field research grant from the Tinker Foundation, Amy conducted original research in Mexico City, exploring the development of the Mexican student movement. Before coming to the Drum Major Institute, Amy headed the research department of a major New York City labor union, where her efforts contributed to the resolution of strikes and successful union organizing campaigns by hundreds of working New Yorkers. She has also been active on the local political scene working with progressive elected officials. Amy resides in Manhattan Valley with her husband.

This article originally appeared in the DMI Blog on June 11, 2009. Re-printed with permission by the author.

Disclaimer: This post is not meant to be an endorsement of any party or candidate but, rather, an exploration of issues affecting small business as shaped by what will *most likely* happen at the polls today.

Today’s election will be historic, no matter the outcome.  If you’re anything near the political junkie that I am, you’ve been watching for the last few days the result projections of some of the major pundits from the basic and cable news networks, as well as from some of the bookies.

If there is a commonality here, it is that Barack Obama looks poised to win fairly big or really big; and that the Democrats will make gains in both the House and Senate – although the Senate “magic 60″ number is still a far cry as of this writing.

Yet, if we assume the above, as David Gergen has noted on CNN, even without the Dems getting a filibuster-proof majority in the Senate, they would still have a greatly enhanced ability to push through legislation that supports their agenda, with a president ready (on most issues) to sign it into law.

How would this scenario affect small businesses?  A look at four issues that are central to their survival and success – two of which have been covered at length by candidates of the two major parties and the media, and two of which have been largely ignored – offer a clue.

Taxes

• Obama’s plan, as detailed on his website, stresses cuts in capital gains taxes and additional tax cuts for corporations that create jobs in the U.S.
• The Democratic Party website also talks about efforts of the majority Democratic Congress (elected in 2006) to “slash regulations on small companies.”
• Point of contention: The now-familiar “Joe the Plumber” caveat: Entrepreneurs who start businesses that generate more than $250,000 in annual revenues would see their taxes go up – albeit to 1990s levels.

Healthcare

• Obama: Establishment of a new Small Business Health Tax Credit to help small firms provide affordable health insurance to their employees.  He has also talked about creating an insurance pool that individuals and small firms can pay into and receive the same benefits that members of Congress receive.
• Democratic Party: Emphasis on cutting bureaucratic waste – chiefly by standardizing electronic medical records – that would, along with incentives to increase competition among health plans, reduce company-paid premiums over time.
• Point of contention: Nationalizing healthcare, which would mandate the coverage of children, would keep costs high.

Changes in Labor Laws – Specifically Enactment of the Employee Free Choice Act (EFCA)

• Obama: A Proponent of the EFCA; wants to make it easier for employees to form unions.
• Democratic Party: Behind the EFCA. They also list a goal of raising the minimum wage.
• Point of contention: The EFCA and federal increase in the minimum wage are both hotly contested issues, with adoption of both falling pretty squarely in the “workers, yay; business leaders, nay” columns.  Since the federal minimum wage was just raised in July, the EFCA bill, if it were highly modified, might stand a better chance of gaining the support of small business leaders in the shorter term.

Immigration Reform

• Obama: Reduce the bureaucracy that slows the process for illegal immigrants to earn legal status, which he argues will “meet the demand for jobs that employers cannot fill.”  Crack down on employers that hire undocumented immigrants.
• Democratic Party: Supports “economic development in migrant-sending nations, to reduce incentives to come to the United States illegally.” Long-term, this would ensure that tax dollars from businesses as well as individuals aren’t stretched as thin.  The party also echoes Obama’s above concerns.
• Point of contention: This is a sticking point for leaders of some smaller firms that are actively hiring undocumented workers.  Most other business leaders seem concerned that their taxes are not raised for inadequate or unnecessary measures to secure our borders.

So, would a fly on the wall of a small organization in February 2009 see a noticably different landscape than in the same firm today?  Probably not.  Still, it doesn’t hurt to project how the probable shift in the balance of power in Washington after today will play out for these enterprises.  Who knows, it may even shape smaller-scale efforts – the things we love to talk about and help our clients refine – like employee engagement best practices and workplace team building.

What say you?

(Cross-posted from Winning Workplaces Blog)

The U.S. Senate has just voted to raise the federal minimum wage. After smooth sailing through the House, as part of the “100 Hours” agenda, things hit a snag in the Senate. It’s all about taxes — isn’t everything? The Senate so far is seems unlikely to pass a clean bill that does nothing but raise the minimum wage (as the House did), but instead seems determined to cut taxes for small business owners, who — it is argued — are adversely affected by the minimum wage. Will it be possible to raise the federal minimum wage — ever?

Is it really true that small business owners fare adversely when the minimum raise is raised? Or is that one of those political maxims that has been repeated so many times that everyone believes it? It may not even matter, if we can’t get the minimum wage raise through the Senate otherwise. But those who argue we shouldn’t couple the issue have some strong arguments. A recent Washington Post article by Steven Pearlstein demolishes the typical arguments for coupling minimum wage increases with small business tax breaks one by one.

1. Small businesses with low profit margins will not be able to pass along those costs to consumers.
Pearlstein responds:

To begin, both economic theory and history suggest that small business will, in time, pass on its increased costs to its consumers. Small businesses that pay low wages tend to compete with other small businesses that pay low wages, so they will all face the same cost pressures and respond in similar fashion. The worst that can be said is that a higher minimum wage will add, very modestly, to overall inflation.

(See Washington Post article.)

2. A minimum wage increase will cause small businesses to hire fewer workers.

There is also general agreement among economists that a higher minimum wage, at the levels we are talking about, will have a minimal impact on adult employment. Slightly higher prices might reduce, slightly, the demand for Wendy’s hamburgers, cheap hotel rooms and dog-walking services. But largely offsetting those effects will be the increased demand for goods and services by tens of millions of Americans who will finally be getting a raise. A higher minimum wage doesn’t lower economic activity so much as rearrange it slightly.

(See Washington Post article.)

3. Small business create the majority of new jobs in this country, so we should not pass measures discouraging them from doing so.

[A]s economist Veronique de Rugy of the American Enterprise Institute reported in a paper last year, new jobs have been created by both large and small businesses in roughly the same proportion. In truth, the bulk of new jobs have always been created by a relatively small number of new firms that grow fast and get quite big — think of companies like Southwest Airlines, Google, CarMax. Most have little in common with the small-business lobby in Washington or fast-food restaurant chains or the members of the Kiwanis Club in Helena, Mont. As a rule, companies like these couldn’t care less about the minimum wage or special tax breaks to offset it.

(See Washington Post article.)

Pearlstein also points out that small business owners have already benefited from business tax cuts enacted earlier in the Bush Administration, astutely opining, “If it is now imperative to reduce business taxes when the pay of minimum-wage workers is rising, you have to wonder if there will ever be a time when the small-business lobby thinks it doesn’t deserve a tax cut.”

Despite Pearlstein’s presence in the newspaper of our nation’s capital, and the fact that his ideological bent is hardly that of a flaming liberal, it’s not clear that anyone’s really listening. Except that some small business owners already know better, according to an article which says that a growing number of small business owners recognize that paying a decent wage lowers employee turnover, improves morale and is the right thing to do. “People who tell you that raising the minimum wage will hurt small business are flat out full of it…Small business owners know that keeping workers is easier and cheaper than finding and training new ones…Our long-term employees are way more likely to establish ongoing relationships with customers,” said Lew Prince, co-owner of Vintage Vinyl, a music retail business in St. Louis. (See TomPaine.com article.)

The minimum wage increase has already faced one setback, as an effort to pass a clean bill failed in the Senate. (See New York Times article.) As I write this, the Senate is likely to pass a minimum wage bill with small business tax cuts attached. (See The Reporter article.) Now the two houses of Congress have to reconcile the proposals — never an easy task — while contemplating what the President is likely to do. President Bush has indicated that he would consider signing a minimum wage bill with tax breaks attached, so there’s an interest in getting a bill that will actually be signed into law. (See Statement of Administration Policy.)

But there’s also the little wrinkle that the House of Representatives is supposed to be the body that originates tax bills, and Rep. Charles Rangel, now the Chairman of the House Ways and Means Committee, is insisting that the House take the lead on tax bills, which may delay working out the issues between the two bodies. (See Associated Press article.) Sen. Harry Reid, the Senate Majority Leader, has indicated that the Senate may be open to limiting some of the tax cuts. (See ABC News article.) So despite the House’s swift passage of a clean bill, we may still be in for a long, hard fight before those workers in states without a higher minimum wage are able to benefit from a federal minimum wage increase.

Those small business tax cut bills can occasionally carry the kind of tax cuts that employee advocates can support, such as a provision contained in 2004’s American Jobs Creation Act — part of the Civil Rights Tax Relief Act. (Ironically, the problem solved in part by the 2004 law arose from a provision inserted in the 1997 minimum wage bill, called — you guessed it, “The Small Business Job Protection Act.”) (For more information on the history of this issue, see “The Long and Winding Road.”)

But this time, workers really have to question whether more tax cuts for small businesses are really necessary, or just a way to keep a myth alive until the next opportunity to raise the minimum wage. Perhaps before assuming these accompanying tax cuts are necessary — it would be helpful for Congress and the President to separate economics from politics. They might even conclude — like the Economic Policy Institute did — that a minimum wage increase requires new small business tax cuts, “like a fish needs a bicycle.”

Tell the Senate to Keep It Clean: Pass the Minimum Wage Increase Now

UPDATE: The Senate on Thursday, February 1 overwhelmingly passed a minimum wage bill with the tax increases referenced above. (See New York Times article.) (The blog was originally published before the vote occurred, although the outcome was not in doubt.)