This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

President Bush has said that he will support an increase in the minimum wage, but in exchange he wants tax cuts that will soften the blow on small business.

The president is right that small business is the engine that drives job growth, but that by itself is not a persuasive argument for more tax cuts, especially if they would make the federal budget deficit worse.

Many small business owners in Utah, a state with virtually full employment, say they can't get people to work for the $5.15 federal minimum wage anyway. The market requires that they pay more. So we are not convinced that a phased increase in the minimum wage to $7.25 an hour, as the Democrats have proposed, would hurt small business.

By contrast, tax cuts that worsen the deficit actually might hurt small business, because a growing deficit should drive up interest rates.

Beyond that, it is difficult to judge the president's bargain, because he has not yet been specific about what tax cuts he wants.

What we do know is that the working poor who earn the minimum wage are due for a raise. The federal minimum wage has not increased since 1997. That's the longest period of time without an increase since the federal minimum wage was created in 1938.

Since 1997, the value of the minimum wage has deteriorated by 20 percent because of inflation, while domestic corporate profits have soared by 72 percent. In terms of actual buying power, the federal minimum wage is now at its lowest point since the early 1950s.

If you doubt that, bear in mind that a person working a 40-hour week and paid $5.15 an hour would earn a mere $10,712 annually. Even a raise to $7.25 an hour would boost earnings to only $15,080. Thus, the minimum wage does not keep a working person out of poverty.

In Utah, a study by a governor's committee estimates that 71,000 people would get a raise if the minimum wage were increased to $7 an hour, and another 99,000 Utah workers who are currently paid $7 an hour also would get a raise because of upward pressure on the wage scale.

An increase in the minimum wage would put upward pressure on prices and downward pressure on profits. But it is wrong to build prosperity on the backs of the working poor. That's a tax that no one should pay.