Fair Minimum Wage Act of 2007

The Fair Minimum Wage Act of 2007[2] is a US Act of Congress that amended the Fair Labor Standards Act of 1938 to gradually raise the federal minimum wage from $5.15 per hour to $7.25 per hour. It was signed into law on May 25, 2007 as part of the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007. The act raised the federal minimum wage in 3 increments: to $5.85 per hour 60 days after enactment (July 24, 2007), to $6.55 per hour a year later (July 24, 2008), and finally to $7.25 per hour two years later (July 24, 2009). In addition, the act provided for the Northern Mariana Islands and American Samoa to make the transition to the federal minimum wage on alternate timetables.

History of the US federal minimum wage. Lower line is nominal dollars. Top line is inflation-adjusted to 2020 dollars.[1]

As of 2008, 13 states already had minimum wage rates at or above $7.25 per hour. These states were therefore unaffected by the increase.

Legislative history

The act was a component of the new Democratic majority's 100-Hour Plan in the United States House of Representatives. It was introduced into the House on January 5, 2007, by George Miller (D-CA) and it was passed by the House on January 10. All 233 House Democrats voted "Aye," and 82 Republicans joined them. 116 Republican representatives voted "No," and 4 representatives did not vote. President Bush advised that the bill should include tax cuts for small businesses that could be harmed by the wage increase, and on January 24, 2007, a cloture motion in the Senate failed as 43 Republican Senators (all but 5) rejected the bill without the tax cuts, opposing all 47 Democrats who were present for the vote. Once tax cuts were added to the bill, the Senate passed the amended bill 94-3 (3 Republicans opposed and 1 did not vote; 2 Democrats did not vote) on February 1, 2007.

The act initially did not amend the Fair Labor Standards Act in regards to American Samoa—its minimum wage would have continued to be set by a committee appointed by the U.S. Department of Labor until changes were made to the act.[3][4][5] After accusations by Republican lawmakers that Speaker of the House Nancy Pelosi was unethical because Del Monte (parent company of StarKist Tuna which owns one of the two tuna canneries in Samoa) is based in her district, she instructed a House committee to have Samoa be included. Samoa's representative Eni Faleomavaega noted that the territory has not been subject to the mainland minimum wage and said, "...the global tuna industry is so competitive that it is no longer possible for the federal government to demand mainland minimum wage rates for American Samoa without causing the collapse of our economy...".[6]

Final passage

The minimum wage was passed by the House and the Senate on May 24, 2007 as part of HR 2206, the supplemental aid to the Iraq War. As part of the deal, $257 million worth of tax breaks were given to small business over a 10-year period to offset the wage increase.[7] The bill was thus ultimately enacted as a rider to the U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007. President George W. Bush signed the bill on the next day.[8]

Proposed amendments

Omissions

The minimum wage increase did not change the tip credit for tipped employees. Originally, it was automatically increased by being pegged to a percentage of the regular minimum wage. However, that changed during the 1990s. The federal tip credit, therefore, remains at $2.13. However, as even tipped employees are subject to the higher of State or Federal wage by law tipped staff effectively benefit from the minimum wage increase just the same.[10]

See also

References

Notes
  1. FRED Graph. U.S. Department of Labor, Federal Minimum Hourly Wage for Nonfarm Workers for the United States. Inflation adjusted (by FRED) via the Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL). Graph retrieved February 8, 2020.
  2. Pub.L. 110–28 (text) (pdf), Title VIII
  3. Miller, George (February 1, 2007). "Text - H.R.2 - 110th Congress (2007-2008): Fair Minimum Wage Act of 2007". www.congress.gov. Retrieved April 13, 2019.
  4. Wage and Hour Division (WHD). "Wage Rates in American Samoa". Department of Labor Reports. United States Department of Labor. Retrieved April 13, 2019.
  5. "29 U.S. Code § 205 - Repealed. Pub. L. 110–28, title VIII, § 8103(c)(1)(A), May 25, 2007, 121 Stat. 189". LII / Legal Information Institute. Retrieved April 13, 2019: Special industry committees for American Samoa.
  6. Faleomavaega Comments on Minimum Wage Bill Now Before Congress Archived January 1, 2008, at the Wayback Machine
  7. "H.R. 2, the Fair Minimum Wage Act of 2007". www.dpc.senate.gov. Retrieved April 13, 2019.
  8. "Fox News.com". Archived from the original on December 10, 2007. Retrieved May 28, 2007.
  9. "S. 256 - Summary". United States Congress. Retrieved September 13, 2013.
  10. "Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA)" (PDF). Wage and Hour Division. U.S. Department of Labor. April 2018. Retrieved April 13, 2019.
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