The U.S. House of Representatives is set to vote today on legislation that would raise the minimum wage from $5.15 per hour to $7.25 per hour in three steps over a period of 26 months.
Under the proposed legislation, the minimum wage would increase to $5.85 an hour effective on the 60th day after the date of enactment of the bill. The minimum wage would increase to $6.55 an hour 12 months after the first increase became effective. In the third step, the minimum wage would rise to $7.25 per hour beginning 24 months after the first increase became effective.
Business groups oppose an increase to the minimum wage, arguing that it would be especially burdensome on small businesses.
President Bush has said that he would support increasing the minimum wage as long as the legislation is packaged with tax and regulatory breaks for small businesses. The legislation set for a vote in the House isn't tied to any tax breaks.
Twenty-nine states have approved minimum wages above $5.15 an hour, including ten that have tied future increases to inflation. However, many of the current state minimums would fall somewhere in between the first and third steps of the proposed federal minimum wage. In the case of conflicting minimum wage levels, the federal or state law that is more generous to employees takes precedence.