[Congressional Record Volume 141, Number 12 (Friday, January 20, 1995)]
[Extensions of Remarks]
[Page E143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


   INCOME EQUITY ACT OF 1995 AND MINIMUM WAGE ENHANCEMENT ACT OF 1995

                                 ______


                         HON. MARTIN OLAV SABO

                              of minnesota

                    in the house of representatives

                        Friday, January 20, 1995
  Mr. SABO. Mr. Speaker, I believe that an increase in the minimum wage 
is needed to restore equality to salaries for millions of Americans. 
For that reason, today I am introducing the Minimum Wage Amendments Act 
of 1995. This legislation will increase the Federal minimum wage to 
$6.50 an hour--an increase that will help nearly 5 million Americans 
better provide for themselves and their families.
  In today's economy, minimum-wage workers are often unable to support 
themselves for one simple reason--the minimum wage has not kept up with 
the cost of living. In the 1960's and 1970's, for example, a full-time 
year-round worker making the minimum wage earned enough to keep a 
family of three above the poverty line. Today that same worker falls 
nearly $3,500 below the poverty line. To supplement their minimum wage, 
workers are often forced to seek assistance from taxpayer-financed 
Government programs such as food stamps, housing subsidies, and medical 
assistance.
  Congress has tried to help. In June 1989, Congress passed legislation 
increasing the minimum wage. Under that legislation, The 1989 Fair 
Labor Standards Act, the minimum wage was raised from $3.35 to $4.25 
per hour.
  Still, the minimum wage has not kept pace with the rising cost of 
living. In fact, the current $4.25 per hour falls almost $2.25 short of 
the real value of the minimum wage in 1968. This failure to increase 
the minimum wage to a level that provides a living puts enormous 
pressure on social programs. In my judgment, all full-time workers 
should make enough money to live off their wages.
  From the time of President Roosevelt, a fair minimum wage helped 
ensure a responsible relationship between workers and management. 
Today, a fair minimum wage is critical to millions of working 
Americans. More than two-thirds of minimum-wage workers are adults, and 
it is estimated that one in five minimum-wage workers live below the 
poverty line.
  When working Americans are unable to support themselves and their 
families, they are left scrambling to pay their bills and put food on 
their tables. Today's minimum wage is too much minimum and not enough 
wage. We can not be content with an economy that helps those at the top 
of the economic ladder climb further up while those at the bottom slip 
further down.
  Mr. Speaker, today I am also introducing the Income Equity Act of 
1995.
  One of the most disturbing trends of the past decade has been the 
increasing polarization of income in this country. To use a familiar 
phrase: ``The rich have gotten richer and the poor poorer.'' In fact, 
the gap between rich and poor families is now larger than at any time 
since the Government began compiling those statistics.
  Put another way, average income of the poorest fifth of the 
population has fallen from 93 percent of the poverty line in 1973 to 83 
percent in 1987. The next poorest fifth has an average income of twice 
the poverty line. On the other end of the spectrum, the richest fifth 
has an income that is almost nine times higher than the poverty line. 
Clearly, the income gap continues to widen.
  More single-parent, female-headed households are stuck in the bottom 
end of the wage scale. Wages for low-income and young workers have been 
stagnant. These trends have helped contribute to a growing class of 
working individuals who are having a tough time making ends meet. This 
poverty is especially damaging because it hits children so hard. Today, 
an alarming one in five children live in poor families. Poverty and the 
problems associated with it--malnutrition, inadequate health care, 
disadvantages at school, and crime--impair a child's ability to perform 
later in life. Those basic problems erect barriers that make it tough 
for children to ever achieve. We need to reverse the trend toward 
growing income inequities.
  My bill, the Income Equity Act, would not only raise the minimum wage 
to $6.50 an hour, but it would also limit the tax deductibility of 
executive compensation to 25 times that of the lowest paid worker in 
the same firm. For example, if the lowest paid worker of a business is 
the clerk who makes $10,000 a year, the business will only be allowed 
to deduct $250,000 in salary and bonuses for senior employees. This 
provision simply draws attention to the incredible income gap present 
in most businesses. Business owners will be forced to take a long, hard 
look at how they compensate both those at the bottom and those the top 
of the income ladder.
  The bottom line is that Americans who work full time should be able 
to provide for themselves and their families without turning to the 
Federal Government for assistance. Both Democrats and Republicans alike 
want to see individuals excel in the workplace. We want to see families 
living well and doing so independent of Government intervention. A 
liveable minimum wage is an essential extension of the work ethic--it 
tells individuals that work is important and should be rewarded 
appropriately.
  Mr. Speaker and Members of the House, I hope you will join me in 
supporting an increase in wages for working Americans.




                          ____________________