Senate Panel, Defying Veto Threat, Backs Hike in Minimum Wage to $4.65 by 1991

Defying President Bush’s veto threat, the Senate Labor Committee voted 11 to 5 Wednesday for a bill that would raise the $3.35 hourly minimum wage to $4.65 in three steps by 1991 without any subminimum rate.

The committee’s swift approval, with similar action expected in the House, could set the stage this month or early in April for the first legislative showdown between the new President and Congress.

Bush has proposed a three-stage increase in the minimum wage to $4.25 an hour, with an eventual top rate of 90 cents an hour less for new workers in their first six months of employment, and he has said he will veto any more generous bill.

‘His Last Offer’

At the White House, Press Secretary Marlin Fitzwater reaffirmed Wednesday that the President would not yield. “He’s giving them our best and last figure up front, and his proposal for an increase to $4.25 an hour is fair and firm and his last offer,” he said.

But Sen. Edward M. Kennedy (D-Mass.) said that the minimum wage has been unchanged since 1981 and he believes there is enough congressional support for an increase to override a presidential veto.

“It’s on a fast track now,” said Kennedy, chairman of the Senate panel and chief advocate of the legislation. “The earlier the better, so far as I am concerned.”

The Senate may vote as early as next week, he said. The House Education and Labor Committee is expected to approve a similar bill next week and seek passage by the entire House before the Easter recess starts on March 23.

The federal minimum wage, first enacted a half century ago at the rate of 25 cents an hour, has been a major battleground for liberals and conservatives in almost every decade since. Although former President Ronald Reagan successfully opposed any increase in his two terms, Bush announced during his campaign that he would favor an increase in the minimum rate but only if it was accompanied by a “training wage” for new workers.

Rejects Bush Plan

Before approving Kennedy’s bill, the Senate Labor Committee rejected Bush’s plan in a 10-6 vote, mainly along party lines. Two Republicans, Dave Durenberger of Minnesota and James M. Jeffords of Vermont, then joined nine Democrats in sending the $4.65 legislation to the Senate floor.

Opponents, led by Sen. Orrin G. Hatch (R-Utah), argued that a higher minimum wage would destroy 650,000 jobs and contribute to inflation. Their arguments were echoed by a business coalition formed to fight any increase in the $3.35 hourly rate.

Coalition director Bob Martin of the U.S. Chamber of Commerce said the committee-approved bill was “misguided and would have very serious economic consequences. We’re saying it will set off a Kennedy round of inflation.”

But, after the committee vote, Kennedy said the case was “compelling” for an increase to $4.65 an hour to restore the 1981 buying power of workers on the economic ladder’s bottom rung.

As for the President’s proposal to pay new workers a lower rate for six months, Kennedy said the Labor Department estimated that minimum-wage workers could be trained in one month. He said he would listen to proposals for a compromise on the amount and duration of a lower wage rate.

Called ‘Substandard Wage’

Sen. Howard M. Metzenbaum (D-Ohio) said Bush’s proposal to pay those workers 80% of the minimum wage rate prevailing for most workers was “just a substandard wage for fast-food operators and others like that.”

But Hatch termed it a “classic compromise” between those in the Administration who oppose any increase and those who want to raise the federal minimum rate on equity grounds. The lower rate, Hatch said, would reduce the loss of jobs that otherwise might accompany a $4.25 wage.

Dashed by Filibuster

Kennedy’s efforts to get Senate approval of a $4.55 hourly minimum wage last year were dashed by a GOP-led filibuster at the session’s close, despite Bush’s general support for an unspecified increase. The House never took up similar legislation in Congress’ last session, partly because Democratic leaders decided that they lacked the votes to pass it.

But Kennedy said that proponents were in a stronger position this year, adding: “This case is so compelling--it’s a minimum standard of decency. This President (Bush) even recommended a 50% increase in pay for members of Congress.”