[Congressional Record Volume 140, Number 39 (Wednesday, April 13, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: April 13, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                   HEALTH CARE REFORM AND EMPLOYMENT

                                 ______


                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Wednesday, April 13, 1994

  Mr. STARK. Mr. Speaker, a number of business groups are opposing 
health care reform and employer mandates They claim that employer 
mandates will drive them out of business and create unemployment.
  The evidence shows they are wrong.
  Those businesses which do not provide health insurance for their 
employees are, in reality, subsidized by other businesses who do the 
right thing and cover the workers, and by the taxpayers who pick up the 
tab for emergency care and charity care for uninsured workers. A recent 
UCLA study showed that in California in 1992, taxpayers paid $4 billion 
for MediCal and emergency room expenses of workers and their dependents 
who were not insured by their own employers. That's not fair to the 
businesses and workers who buy health insurance through the workplace.
  Most health reform bills would require all businesses to provide 
roughly 80 percent of the cost of insurance for their workers. For the 
firms who do not now provide coverage, this would be the equivalent of 
an increase in the minimum wage; it would be an increase in the hourly 
cost of employing people.
  Would it create massive unemployment and economic disaster? No, past 
minimum wage increases did not.
  The restaurant, apparel, food store, and hotel industries are sectors 
that are complaining bitterly about the impact of a health insurance 
mandate. They are also industries associated with a lot of minimum wage 
and lower paid workers. What happened to the number of establishments 
and workers in these four industries during 1990 and 1991--the latest 
year for which data are available?
  I pick these years, because on April 15, 1990, the minimum wage was 
increased 45 cents an hour and again on April 15, 1991, it was 
increased another 45 cents to the current total of $4.25.
  The question is complicated by the fact that there was a major 
recession starting in July, 1990, and continuing until March, 1991, and 
it took until March 1992, for the economy to return to its prerecession 
levels, thus most sectors of the economy showed serious declines during 
this time period. The Department of Commerce census data shows that 
between 1990 and 1991 there was a 1.26 percent decline in total private 
employment, but a 0.4 percent increase in the number of establishments 
open for business.
  In the total retail sector, there was a 1.09 percent decline in 
employment, which was less than the national total decline, while in 
the services sector there was a 2.69 percent increase in employment. In 
the eating and drinking establishment--restaurant--area, there was a 
job decline of 0.7 percent but an increase in the number of 
restaurants. In the apparel and accessory stores sector, employment 
increased 0.09 percent, while the number of stores declined. In food 
stores, there was a 0.3 percent decline in employment, but the number 
of stores increased. In the hotel and lodging sector, employment 
declined 1.34 percent but again the number of establishments increased 
by about 3.86 percent.
  In short, in three of the four sectors, employment declined less than 
it did overall nationally--in one sector employment actually increased. 
In three of the sectors, businessmen were busy opening more stores than 
closed.

   COMPARING INDUSTRIES: HOW MINIMUM WAGE INDUSTRIES COMPARED TO OTHER  
      INDUSTRIES AFTER THE MINIMUM WAGE INCREASES OF 1990 AND 1991      
                              [In Percent]                              
------------------------------------------------------------------------
                                                             Change in  
              Type of business                Change in      number of  
                                              employment  establishments
------------------------------------------------------------------------
Total economy..............................        -1.26          +0.40 
Total retail sector........................        -1.09          +1.15 
Total services sector......................        +2.69          +4.00 
Eating and drinking places.................        -0.70          +3.14 
Apparel and accessory stores...............        +0.09          -1.70 
Food stores................................        -0.30          +0.92 
Hotel and lodging..........................        -1.34          +3.86 
------------------------------------------------------------------------

  The next time a businessman complains about health care mandates in 
an economy that is growing rapidly, ask them about their experience 
with the 1990 and 1991 minimum wage increases. Ask them what is 
different about the cost of a mandate and the cost of a minimum wage 
increase. Ask them why they can't do the right thing and pay their fair 
share of America's health care costs instead of being subsidized by 
their competitors and the taxpayers.

                          ____________________