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MONEY | fall 2006

The Sin of Wages
Congress plays politics with lowest-paid women workers

The bride was a raise in the minimum wage. The groom was a cut in the estate tax. The bride’s family (Democrats) didn’t like the groom, and the groom’s family (Republicans) really hated the bride but just wanted to make her family extremely uncomfortable. In the end the wedding was canceled due to lack of support from both sides of the aisle.

In one of the most cynical moves on Capitol Hill to date—and that’s saying a lot—the Republican majority tried this past summer to push through a raise in the minimum wage, something they have fought against vigorously since the last raise in 1997. In a fool-the-public charade, they tied the proposed hike to yet another cut in the estate tax. The hope was that Democrats would vote against this unholy coupling (they did), while Republicans could claim to be champions of working people (without having to actually pass the wage increase). The endgame: Republicans are now charging Democrats with voting against a raise for low-income Americans, while still touting their efforts to cut the estate tax to their mega-millionaire supporters who write the checks.

Females in Congress played a major role in the defeat, and this, too, was engineered by the Republicans. In addition to tying the minimum wage to estate-tax cuts, they loaded up the bill with provisions specifically targeting women in the Senate. Sens. Maria Cantwell and Patty Murray, both Democrats from Washington state who stood together against the bill, were pressured by an add-on that would have renewed a popular sales-tax deduction for residents of Washington, and would have provided a long-sought tax break for the state’s timber industry. The vote was hardly concluded when Republicans began their attack, accusing Cantwell of “folding like a cheap tent.”

Another part of the bill seemed aimed at embarrassing Sen. Hillary Clinton (D-N.Y.). Borrowing from another pending tax measure, Republicans stuck in a $1.75 billion tax credit for New York City, forcing the senator to vote against such projects as a rail link between Kennedy International Airport and Lower Manhattan.

Is this just insider maneuvering that doesn’t matter to most of us? Hardly. Many people believe that the majority of minimum-wage earners are teenagers working for gas money, but that’s not true. A whopping 61 percent of workers stuck to the floor of the wage scale are adult women, and almost one-third of them are raising children. At $5.15 per hour, the current minimum wage is pitifully inadequate. A single mother with two kids working for this measly pay ($10,700 per year) falls $5,378 below the poverty line. There is not one state where she could afford adequate food, housing and child care. Another 4.73 million women work at just above minimum. In contrast to these wages, the average CEO of a Standard & Poor’s 500 company takes down $5,649 per hour.

Women have been at the center of the debate over minimum wage since its inception as part of President Franklin Roosevelt’s New Deal. Then as now, the Supreme Court was hostile to women, in 1923 voiding the District of Columbia law that set minimum wages for females. In 1936 the Court struck another blow to fair wages in its most notorious case, again involving women’s pay: The justices overturned New York’s minimum wage law, siding with a laundry owner paying women $10 per week instead of the mandated $14.88. It was one of the most unpopular opinions ever rendered by the Supreme Court, enraging even some conservatives. Republican congressman Hamilton Fish called it a “new Dred Scott decision” condemning 3 million women and children to economic slavery.

Under threat from Roosevelt to pack the Court with new appointments if its philosophy didn’t change, the Court reversed course in 1937 and decided in favor of Elsie Parrish, a former chambermaid at the Cascadian Hotel in Wenatchee, Wash., who had sued for $216.19 in back wages, charging that the hotel had paid her less than her state’s minimum. The victory brought renewed effort for a federal minimum, which became law as part of the Fair Labor Standards Act of 1938. The architect was none other than Frances Perkins, the first woman secretary of labor, who only agreed to take the job if President Roosevelt would make minimum wage a priority.

Just as states took the lead on this issue in those early days, local and state jurisdictions are being forced again to move ahead on their own. Last summer’s hypocrisy notwithstanding, Republicans in Washington have blocked dozens of bills proposing a raise at the federal level since President Bush took office. So the states have circumvented D.C.: Higher minimums have either passed or are pending in 24 of them—six are ballot measures to be voted on November 7. Undoubtedly, politicians from both sides of the aisle realize that women are the majority of voters and will use their clout at the polls to support referenda boosting family incomes.

Even Republican governors are recognizing the need to lift America’s working poor, and have elected not to follow their national leaders with regard to women’s wages. Mike Rounds of South Dakota has committed to pushing through a state increase, and Linda Lingle of Hawaii let a hike go through last year without her signature. Gov. Schwarzenegger signed a bill two months ago raising California’s minimum to the highest in the nation ($8, up from the current $6.75), beginning in January.

Meanwhile, back in Washington, even though he knew there would be no time to reschedule a vote before the summer recess, Sen. Majority Leader Bill Frist (R-Tenn.) changed his vote to “no” at the last minute, preserving his right to call for a new debate. So look for the minimum-wage-plus-estate-tax marriage-from-hell to resurface again for a floor vote before the November recess, along with rhetoric about “helping working families.” Sorry, Bill, women may be poor, but they’re not fools.

Martha Burk is author of Cult of Power: Sex Discrimination in Corporate America and What Can Be Done About It (Scribner, 2005).