Senate OKs minimum-wage boost to $7.25

WASHINGTON — The Senate voted overwhelmingly Thursday to boost the federal minimum wage by $2.10 to $7.25 an hour over two years, but packaged the increase with small business tax cuts and limits on corporate pay that could complicate its path to become law.

The increase in the minimum wage, the first in a decade, was approved 94-3, capping a nine-day debate over how to balance the wage hike with the needs of businesses that employ low-wage workers.

Utah's senators signed off on the bill because it included additional provisions aimed at protecting small businesses.

The House passed a minimum wage increase bill last month and now the chambers will have to work out differences between the bills. The similar parts of the bills raise minimum wage from $5.15 to $7.25 an hour incrementally over the next two years.

"I agree with economic studies that show an increase in minimum wage would actually decrease job opportunities for those with minimal skills," Sen. Bob Bennett, R-Utah, said in a statement. "However, I voted for the bipartisan compromise because it includes provisions that will minimize the burden on small businesses that employ millions of Americans and will allow them to continue to grow and create jobs."

The Senate version of the bill changes the tax code for small business, including a $112,000 write-off in the first year for equipment purchased, quicker deductions for improvements to a restaurant or leased property and extending a tax credit for "employers who hire workers who have experienced barriers to entering the work force," according to the office of Sen. Orrin Hatch, R-Utah.

Hatch said, "Small businesses shouldn't have to bear the brunt of a minimum wage increase."

"Without relief from the cost of a hike in the minimum wage, many small businesses may be forced to lay off workers or cut back hours," Hatch said in a statement. "The Senate bill strikes the right balance. Small businesses are the engines of economic growth and this tax relief will help them to do what they do best — keep and create jobs."

A top priority of Democrats, the wage hike has both real and symbolic consequences. It would be one of the first major legislative successes of the new Democratic-controlled Congress.

"Passing this wage hike represents a small but necessary step to help lift America's working poor out of the ditches of poverty and onto the road toward economic prosperity," said Sen. Edward Kennedy, D-Mass.