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Thursday, June 22, 2006
Minimum Wage Increase Defeated in the Senate
The Senate voted yesterday (twice) to keep low-wage workers in poverty.* The first vote was on a Sen. Ted Kennedy (D-MA) plan to increase the minimum wage from $5.15 to $7.25 per hour over two years. The measure was an amendment to the FY2007 Defense appropriations bill. The second vote to keep the minimum wage at the 1949 level** was on a Republican bill, introduced by Sen. Mike Enzi’s (R-WY), and would have increased the minimum wage to $6.25 per hour.
The federal minimum wage has been unchanged since 1997. But, while the lowest-paid workers have seen their wages steadily eroded by inflation, American CEOs have been enjoying massive pay raises. EPI’s Economic Snapshot this week brings this fact into stark relief:
In 2005, the average CEO in the United States earned 262 times the pay of the average worker, the second-highest level of this ratio in the 40 years for which there are data. In 2005, a CEO earned more in one workday (there are 260 in a year) than an average worker earned in 52 weeks.
And it’s not just American CEOs enjoying an ever-widening income gap. Congress voted last week to give themselves a $3,300 per year pay raise, increasing their salaries to $168, 500. This $3,300 is a 2% cost-of-living adjustment that automatically kicks in every year unless Congress votes against it. A minimum-wage worker has to work about 16 weeks to earn $3,300.
*At $5.15 per hour, a worker working fulltime, year-round earns $10,712. The poverty line for a family of three is $16,600 ($13,200 for a family of two).
**"Today, the minimum wage is 33% of the average hourly wage of American workers, the lowest level since 1949."
Posted by Craig Jennings
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