WASHINGTON — A proposal by Democrats to increase the federal hourly minimum wage to $7.25 from $5.15 appeared headed for defeat on Tuesday.

A House committee that initially adopted a wage boost did an about-face and rejected it. House Majority Leader John Boehner (R., Ohio) told reporters that he does not support a boost and will likely block attempts to bring it to the floor. House Democrats vowed to continue their efforts to keep the measure alive as Congressional elections in November draw closer.

In the Senate, Edward Kennedy (D., Mass.), introduced an amendment to a defense spending bill to raise the minimum wage. The initiative was expected to come up for a vote Tuesday night. Congress hasn’t increased the minimum wage since 1997.

Retail and apparel manufacturer and import groups oppose the higher wage. Organized labor argues, however, that it would have a modest impact on the economy and substantially help lower income wage earners.

“In the last five years, we’ve seen 5.7 million Americans fall into poverty,” Kennedy said at a news conference on Capitol Hill. “We haven’t increased the minimum wage for nine years. We’ve increased members of Congress salaries six times during that period.”

Kennedy said Republican leaders planned an alternative that would slightly raise the minimum wage and give tax breaks to industries.

Stephen Lamar, senior vice president at the American Apparel & Footwear Association, said government apparel contractors would be adversely affected by an increase. He said there appeared to be a move in Congress to explore an alternative that would pair a wage increase with tax breaks for small businesses. Lamar questioned whether Congress could craft a bill that “mitigates the impact and does not put more pressure on businesses, which result in them hiring less people or firing more people because they can no longer afford it.”

Rob Hall, vice president of government and political affairs at the National Retail Federation, said the impact of an increase would vary by state, since many have minimum wage laws that are higher than the federal rate.

“It’s a regional issue for smaller retailers and specialty stores,” Hall said.

This story first appeared in the June 21, 2006 issue of WWD. Subscribe Today.

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