WASHINGTON — The Senate defeated two proposals to raise the federal minimum wage Wednesday as Democrats and Republicans battled over “flex time,” the size of the increase and the impact on small businesses.

Sen. Edward Kennedy (D., Mass.) unsuccessfully tried to attach an amendment to a defense spending bill that would have increased the federal hourly minimum wage to $7.25 from $5.15. Although a majority of the Senate backed his proposal on a vote of 52-46, Kennedy’s amendment failed to get the 60 votes needed for passage under a procedural agreement he reached with Senate Republican leaders.

A second proposal offered by Sen. Michael Enzi (R., Wyo.) as an alternative to Kennedy’s amendment was defeated 53-45. It would have raised the hourly minimum wage by $1.10 over 18 months to $6.25.

Despite defeats in the Senate and House this week, retailers feel the minimum wage issue is still alive, much to their dismay.

Republican efforts to raise the minimum wage are more likely to move ahead as the presidential election draws closer. Meanwhile, House Democrats are vowing to make it a top agenda item if they regain control of the House in the November elections.

“I would say this issue is still alive,” said Rob Green, vice president of government and political affairs at the National Retail Federation. “It is an election year and all 435 members of the House are up for reelection and there is a core of the Republican conference that does support a wage increase.”

Green has said a federal wage hike is an issue for smaller retailers and specialty stores. The NRF opposed Kennedy’s amendment, but did not take a stance on the Enzi proposal.

The main point of contention over the two measures on the Senate floor Wednesday was not the $1 difference in the increase, but changes to work rules in Enzi’s proposal. It would have given a minimum wage earner the ability to reach an agreement with an employer for “flex time” that would allow the employee to work 10 extra hours in one week and 10 fewer hours the following week in a two-week period.

Republicans argued the provision would benefit far more minimum wage earners than an increase in the wage rate alone. They maintained that single mothers, for example, could use the time off in the second week for their children’s activities.

This story first appeared in the June 22, 2006 issue of WWD. Subscribe Today.

“This is much more important than the fight over $1.10 or $2.10 increase because it would impact so many more people,” said Sen. Judd Gregg, (R., N.H.), who backed Enzi’s proposal.

Kennedy said Democrats support the concept of flex time in general, but said he opposed Enzi’s provision because it left the decision on when an employee could take the time off to the employer and eliminated overtime for the extra hours worked in the first week.

“You work the extra hours and you don’t get the extra pay,” Kennedy said. “Some deal.”

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