Conservative Senators Attempt To Abolish Federal Minimum Wage And Pass Tax Breaks For Businesses

Yesterday, a minority group of conservative senators killed a clean minimum wage bill that would have raised the federal minimum wage to $7.25 an hour. Instead, the Senate will now be voting on a “compromise” bill that will pair a minimum wage increase with tax breaks for small businesses.

Sen. Mike Enzi (R-WY) justified his opposition to the clean bill by stating, “We’re trying to make sure we don’t put mom-and-pop businesses and their employees out of work.” President Bush has also said that won’t support a wage increase without business tax breaks because he “punish the millions of small businesses that are creating most of the new jobs in our country.”

But their objections to a clean minimum wage increase are based on myths:

MYTH #1 — Raising the minimum wage will hurt businesses. A study by the Center for American Progress found that employment in small businesses, the number of small businesses, and inflation-adjusted small business payroll growth grew more in states with higher minimum wages than federal minimum wage states. Almost 300 large and small business owners across the country have signed on to Business for a
Fair Minimum Wage, which is pushing Congress to raise the federal minimum wage. A recent Gallup poll found that “three out of four small businesses said that an increase in the minimum wage would have no effect on their company.”

MYTH #2 — Businesses can’t afford to give workers a wage increase. In the past 10 years, Congress has “showered corporations with $276 billion in tax breaks, plus another $36 billion aimed exclusively at small businesses.” Steven Pearlstein of the Washington Post adds that even though the Bush administration has gifted declining tax rates to small businesses over the past several years, “according to the Internal Revenue Service, small-business owners, sole proprietors and the self-employed are, as a group, the biggest tax cheats in America, responsible for $153 billion of the estimated $345 billion tax gap in 2001.”

Today, some conservative senators tried to go even further by completely abolishing the federal minimum wage. Amendments no. 158 by Sen. Jim DeMint (R-SC) and no. 116 by Sen. Wayne Allard (R-CO) would have allowed the states to set their own minimum wage levels.