WASHINGTON D.C. — The National Restaurant Association praised the Senate for voting down an amendment to S. 2766, the Fiscal Year 2007 Defense Authorization Act, which would have raised the federal minimum wage from $5.15 to $7.25 over the next two years.

NRA president Steve Anderson questioned Sen. Ted Kennedy's proposal. Anderson said Kennedy desired to target small businesses that employ entry-level positions. This would impede job creation and hurt those that the bill intended to assist, Anderson said. "As the nation's largest private-sector employer with 12.5 million workers, the restaurant industry is grateful that the Senate recognized the adverse economic impact that this amendment would have on our nation's small businesses," he said.

A federal wage increase to $7.25 per hour, as proposed by Sen. Kennedy, is the largest increase in the entry-level wage rate ever proposed. Increases in the federal minimum wage have had a dramatic impact on restaurant industry employment. An analysis based on a nationwide survey of 1,000 restaurant operators showed that more than 146,000 jobs were cut from restaurant payrolls, with operators postponing plans to hire an additional 106,000 new employees after previous federal wage increases.

Two-thirds of workers who start at the minimum wage see a salary increase within one year even without a mandate from the federal government. The restaurant industry supports higher wages appropriate to the skill levels and experience of its employees, and strongly believes that the market best determines entry-level compensation in different regions of the country.

"At a time when businesses are buffeted by high energy costs and soaring insurance costs, a federally mandated minimum wage increase would only create further hardship for our nation's small businesses," Anderson said.

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