House OKs bill to raise minimum wage by '08

INDIANAPOLIS -- Legislation that would raise the state's minimum wage and lessen the impact of the inheritance tax passed the House Tuesday on a 71-29 vote, with only Republicans voting against it.\nThe bill would increase Indiana's minimum wage from $5.15 an hour to $7.50 an hour by 2008. The legislation would also change how much inheritance children or other descendants could receive tax free. Currently, the first $100,000 is exempt, but the bill would bump that threshold to $200,000.\nSome Republicans who support the inheritance tax measure but do not want to increase the state minimum wage said the two proposals should not be in the same bill.\n"These are two issues which are just not related at all," said Rep. Tim Harris, R-Marion, who voted for the legislation.\nRep. Michael Murphy, R-Indianapolis, said he would vote for the proposal because the inheritance tax was important, while raising the minimum wage would not have a great impact on many businesses.\n"I can't find anybody who still pays $5.15 an hour," Murphy said. "The market has moved beyond this political debate."\nAt the current state and federal minimum wage of $5.15 an hour, a full-time worker makes about $10,700 a year. At $7.50 per hour, the annual salary is about $15,600 -- just above the average poverty threshold for a family of three in 2005.\nThe bill would increase the minimum wage to $6 an hour on Sept. 1, to $6.75 on March 1, 2008, and to $7.50 on Sept. 1, 2008.\nEven if Indiana's rate doesn't change, minimum wage workers in the state could be getting a pay raise. Congress is moving forward with a plan to raise the federal minimum wage from $5.15 to $7.25 an hour over two years. If both plans succeed, the higher of the two wages would be paid to most minimum wage employees.\nOf Indiana's roughly 1.8 million hourly workers, about 2 percent, or 37,000, make $5.15 an hour or less, according to 2005 data from the Bureau of Labor Statistics.