Minimum-Wage Increase Defeated by Republicans

• Originally published in the LA Times on 3/8/2005 [here]

 By Mary Curtius
 Times Staff Writer

 March 8, 2005

The GOP-controlled Senate votes down a Democratic-backed effort to attach a proposed increase to its bankruptcy bill.

 WASHINGTON — Republicans on Monday defeated another in a series of Democratic attempts to alter legislation aimed at toughening bankruptcy laws, voting down a proposal to attach a minimum-wage hike to the bill.

 An amendment offered by Sen. Edward M. Kennedy (D-Mass.) would have raised the federal minimum wage from $5.15 to $7.25 an hour over two years. It was defeated, 49-46.

 The GOP-controlled Congress has blocked all such Democratic-backed efforts to increase the minimum wage in recent years. And Senate Republicans were especially determined to keep the Kennedy amendment off the bankruptcy bill because the House GOP leadership has promised to act quickly on the measure only if it remains largely unchanged.

 Banks and credit card companies strongly back the legislation, which Republicans have labored for eight years to enact. Its supporters say the bill would curb abuse of the nation's bankruptcy laws and force more Americans to be financially responsible by requiring them to pay back more of the debts they incur.

 If passed, the bankruptcy bill would force debtors to pass a "means test" that would determine whether their assets were enough to pay back at least part of what they owed. Those with annual household incomes below their state's median level would be allowed to apply for forgiveness of their debts, as they are under existing law. But those making more than the median would have to develop a repayment plan.

 In California, the median household income is about $50,000.

 Kennedy, in arguing for his amendment, noted that the federal minimum wage has not been increased for eight years.

 "For minimum-wage workers, prices have increased every year since 1997, but their paychecks have remained exactly the same," Kennedy said. "With few savings, and little safety net, minimum-wage workers are one pink slip or one medical emergency away from bankruptcy."

 But Republicans said that hiking the minimum wage would only hurt low-income, low-skilled workers by forcing producers to raise prices and cut jobs.

• AFL-CIO: States Should Hike Minimum Wage [more]