Democratic presidential candidate John Kerry (search) on Friday proposed raising the federal minimum wage (search) to $7 an hour by 2007, which he contended would benefit working women more than any other group.

"If a president can go out and fight for four years to provide over a trillion in tax cuts to the wealthiest people in America, we can fight for a few months to raise the minimum wage for the poorest people in America," Kerry told an audience at Northern Virginia Community College.

Kerry's proposal, which calls for phasing in the $1.85 increase, mirrors Democratic-sponsored plans proposed in the House and Senate. President Bush has supported a federal minimum wage increase, provided that states could opt out and choose not to raise it.

Bush campaign spokesman Steve Schmidt said Bush would consider any reasonable, gradual increase but wants to avoid additional costs for small businesses and companies creating jobs.

Kerry rejected that argument. "Some people stand up and say, 'Oh gosh, don't raise the minimum wage, that's going to hurt us in this small business.' But you know what? It never has."

Kerry said three of four women who would benefit from the increase are adults. Such a boost in the minimum wage, which has not changed from $5.15 since 1997, would provide a family with enough money to buy 10 months of groceries or pay for eight months of rent, he said.

Inflation has eroded the value of the last increase in minimum wage, Kerry said.

Kerry said Americans are "living with a minimum wage that is lower in value that it's been at any time since 1949 when Harry Truman is president. That's unacceptable."

Eileen Appelbaum, a Rutgers University labor economist who supports the proposal, said raising the minimum wage by $1.85 would translate into more than $3,800 a year in additional income for a minimum-wage earner.

"If you're down at the bottom of the labor market, an increase of $3,800 a year can make a real difference to families struggling to put food on the table, struggling to pay the rent," Appelbaum said in a conference call organized by the Kerry campaign.

Kerry's proposal is a shift to fiscal policies as the economy is rebounding under Bush. With casualties mounting in Iraq and Bush's justification for war under increasing question, his Democratic challenger has sharpened his criticism of the war after having struggled to explain his position during the primary campaign.

In the midst of a two-week campaign swing focusing on ways to improve the financial standing of American families, Kerry cites statistics like rising bankruptcy rates and dropping wages as a share of national income. Yet he can no longer point to rising unemployment as the main evidence that Bush's economic leadership is failing. So far this year, 1.2 million jobs have been created, although there is still a net job loss of more than 1 million jobs since Bush took office.

Kerry said Thursday that more jobs will be created during the coming months, but "my candidacy is not based on the fact that we've lost a job here or there." He said the campaign will continue based on the need for better health care, education, environmental protections and foreign policy.

"What will not go away is the impact of the loss of moral authority of the United States in the world because of what's happened in the prisons in Iraq and because of the abuses that we've seen and the failure of this president to show that he can lead our country with the truth," he said.

The Sept. 11 commission found this week that Saddam Hussein did not have ties to al-Qaida, disputing a central justification Bush used for invading Iraq and toppling the former Iraqi regime.

Bush disputed the commission and continued to maintain the former Iraqi leader had numerous contacts with Al Qaeda. But Kerry said the report shows Bush "rushed to war for a purpose that it now turns out is not supported by the facts."

"This administration took its eye off of Al Qaeda, took its eye off of the real war on terror in Afghanistan and northwest Pakistan and transferred it for reasons of its own to Iraq," Kerry said.

"And the American people are paying billions of dollars now because of that decision. And most importantly, American families and American soldiers are paying the highest price of all."

Kerry was criticized during the last 18 months for failing to articulate a clear position on Iraq. He voted to give the president authority to go to war, but then criticized him for doing so without more diplomacy.