Facebook Twitter



President Clinton signed into law Tuesday the first rise in the minimum wage in five years, giving the lowest-paid Americans a 90-cent raise but sweetening the pill for small businesses with tax cuts.

The bill, boosting the wage to $5.15 per hour in 1997, was a political victory for Clinton, who called for an increase when he campaigned for president in 1992, and his fellow Democrats, who forced it through over the objections of many Republicans.The fact that both of the Republican-controlled houses of Congress passed the legislation with strong majorities reflects election-year imperatives, as few legislators are willing to go to the polls on Nov. 5 having voted against it.

The president celebrated his victory by signing the bill in high style, holding an elaborate outdoor ceremony on the South Lawn.

The bill will boost the wage, typically paid to unskilled workers, by 50 cents to $4.75 on Oct. 1 and by 40 cents to $5.15 on Sept. 1, 1997.

Although the legislation will raise salaries of many U.S. workers, in inflation-adjusted terms it will not even restore the wage to its level in April 1991, when it was last increased.

One official said that in constant 1996 dollars the wage stood at $4.89 in April 1991 and will only be $4.85 in September 1997 after the full increase is in effect.

Boosting the wage was supported by roughly 80 percent of Americans but bitterly opposed by conservatives who came into office in the 1994 election that gave control of both houses of Congress to the Republican Party."Considering how resolutely anti-Clinton and ideological this Congress was, for one of its very few accomplishments to be a Democratic bill to increase the minimum wage is quite remarkable," said William Dickens of the Brookings Institution.

The legislation, formally called the "Small Business Jobs Protection Act," was made easier for Republicans to swallow by adding a package of tax breaks worth roughly $22 billion over 10 years aimed mostly at small businesses.

Mark Wilson, who specializes in labor issues at the conservative Heritage Foundation, estimates that the law would eliminate 200,000 job opportunities - jobs either not created or jobs terminated - because of the higher labor costs.

But other economists argue the negative effects of the increase will be minimal. " expect only a small increase in inflation - about 0.1 percent," Wharton Economic Fore-cast-ing Associates wrote in a recent study. "Job losses will also be small - the net job loss will be only about 20,000."

Later this week, Clinton also is to sign bills expanding working Americans' access to health insurance and ending the six-decade federal guarantee of welfare benefits to the poor.

Tuesday's bill will:

- Provide a $5,000 credit for both domestic and foreign adoptions through 2001 and a $6,000 permanent credit for domestic adoptions of hard-to-place children.

- Permit homemakers to contribute $2,000 to Individual Retirement Accounts, the same as spouses working outside the home.

- Retroactively reinstate the $5,250 exclusion for employer-provided tuition and extend it through June 1996.



Minimum wage history

The federal hourly minimum wage

being enacted Tuesday:

September 1997 $5.15

October 1996 $4.75

Previous wage increases:

April 1991 $4.25

April 1990 $3.80

January 1981 $3.35

January 1980 $3.10

January 1979 $2.90

January 1978 $2.65

January 1976 $2.30

January 1975 $2.10

May 1974 $2.00

February 1968 $1.60

February 1967 $1.40

September 1963 $1.25

September 1961 $1.15

March 1956 $1.00

January 1950 75 cents

October 1945 40 cents

October 1939 30 cents

October 1938 25 cents