posted August 03, 2006 11:58 AM              

In Michigan our minimum wage was raised by Gov. Granholm ( Dem. ) to $7.25 an hour and without any strings attached. That raise went into effect at the beginning of July.

Minimum wage double-cross in Congress
by Yonce Shelton

" ... my chosen shall long enjoy the work of their hands. They shall not labor in vain" (Isaiah 65:22-23).

Work must "work" for families, and increasing the minimum wage can help. How society treats its workers says much about our values and priorities. The federal minimum wage was last increased, to $5.15, in 1997. Since then its purchasing power has dropped 20 percent and is now at its lowest level since 1955.

This year, Senate Democrats vowed not to allow a vote on raising their own pay until they are allowed to vote on raising the minimum wage. Fifty-eight House Republicans asked their leadership for a vote before the August congressional recess. In late July, 30 House Republicans said they would join Democrats in preventing the House from recessing until there was a vote.

These efforts paid off. Sort of.

Last Friday, the House passed legislation to raise the minimum wage to $7.25 per hour over three years. But there's a catch. The bill (Estate Tax and Extension of Tax Relief Act - aka "trifecta" bill) would also permanently reduce the estate tax - an important source of federal revenue impacting only the wealthiest half of one percent of our nation's taxpayers, which also encourages billions in charitable donations (according to the Congressional Budget Office, between $13-25 billion in 2000). The bill would also extend other expiring tax cuts.

In essence, House leadership decided it was fine to help an estimated 14.9 million workers making less than $7.25 per hour increase their average annual income by $1,200 to $4,400, as long as 8,200 wealthy people receive an average estate tax reduction of $1.4 million (in 2011). Minimum wage workers earning as low as $10,700 per year are given a raise, but only if a few individuals with estates worth more than $3.5 million benefit as well.

Many elected officials worry about the impact on small businesses of increasing wages. However, one study failed to find any systematic, significant job loss associated with the 1997 minimum wage increase. Further, states with higher minimum wages have outdone those with lower wages in their levels of employment, including for jobs in retail and small businesses. Similarly, many fear dire consequences for family farms of keeping the estate tax in place. But the American Farm Bureau has not referred publicly to any examples of farms being sold to pay estate taxes, according to a recent New York Times article.

Businesses will not be harmed as many claim. But the "trifecta" bill is likely to harm low-income workers, despite the wage increase. The estate tax provision, when fully in phased in (2012), will cost the Treasury $753 billion over 10 years. With $753 billion we could fund ALL social programs covered by the annual health and human services budget. Without tax revenue to provide for social and community needs - highways, education, emergency responses - it's easier for Congress to claim spending is out of control and justify eliminating investments in the common good. It's happened before.

Think back to last year's budget process. Proclaiming fiscal restraint, political leaders cut $40 billion in social services (health care, child support, educational assistance) for the less fortunate. In reality, those cuts made room for $70 billion in tax cuts. Simple math tells us the result was actually an increase in the deficit (by $30 billion) AND more tax cuts heavily favoring the wealthy at the expense of basic supports for the poor. The bill passed in the House last week will have a similar effect.

We will soon mark the anniversary of Hurricane Katrina, when poverty briefly topped the national agenda and the importance of community support and investment for the common good was illustrated. When Katrina hit, the Senate was intent on repealing the estate tax but had to drop that effort. Even President Bush eventually reversed course and reinstated wage protections for Gulf construction workers that he had removed in September 2005. That we are back to fighting an estate tax rollback that is 75 percent of the cost of full repeal, and having to fight gimmicks disrespecting hourly wage earners, says much about our political leaders' priorities.

The House leadership proudly touted its "American Values Agenda" week in July, which included votes on gay marriage, the pledge of allegiance, abortion, and human cloning. Missing from that agenda was the value of promoting family economic security. Integrity of political procedure seems also to have been missing, which isn't new. Before last week's vote, a $7.25 minimum wage increase passed a House committee as part of an appropriations bill. Apparently that committee's values took House leaders by surprise. Stuck without an easy way to strip out the wage increase, House leadership has chosen not to move that appropriations bill forward until after the elections. By denying a straightforward vote and coupling the wage increase with other politically dicey provisions, House leaders are again choosing political charades over people and the common good.

If the "trifecta" bill becomes law (the Senate will vote on it this week), the trade-off for a minimum wage increase will be a sacrifice of other supports for working families playing by the rules but coming up short. Work must "work" - working families, individuals, and those unable to work deserve a living family income. They deserve to be treated with respect - especially by their elected representatives. They deserve an up or down vote on the wages for their labor.