[Congressional Record Volume 141, Number 22 (Friday, February 3, 1995)]
[Senate]
[Pages S2078-S2079]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                      INCREASE IN THE MINIMUM WAGE

  Mr. KENNEDY. Mr. President, I commend the President for his 
leadership in bringing together so many Members of Congress this 
morning in support of an increase in the minimum wage for working 
families. The increase proposed by the President would raise the wages 
of more than 7 million hard-working Americans who currently earn less 
than $5.15 an hour. The increase would lift substantial numbers of 
working families out of poverty and diminish its severity for many 
more. The increase would also help millions of middle-class families 
who depend on the earnings of low-wage workers to get back on the track 
toward a better standard of living for themselves and their children. 
It is simple justice for working Americans.
  Since the enactment of the first Federal minimum wage law in 1938, 
bipartisan majorities of the Congress have seven times reaffirmed the 
Nation's commitment to the minimum wage by voting in favor of minimum 
wage increases. Once again, Democrats and Republicans must join 
together to address the decline in the real value of the minimum wage. 
If we fail to act, by next year the real value of the minimum wage will 
be lower than it has been at any time since 1955.
  Our economy is growing, corporate profits are up, and so are the 
incomes of the wealthiest 20 percent. But the vast majority of 
Americans are still losing ground. An increase in the minimum wage is 
long overdue. It ought to be part of any contract with America, and I 
hope we can vote on it in the first 100 days.
  Mr. President, just an hour ago, the President of the United States 
in the White House reminded us that in 1989, when Congress last 
addressed this issue and voted overwhelmingly with bipartisan support 
to increase the minimum wage, we had a Republican President and 
Democratic majorities in the House of Representatives and Senate, but 
The President and the Congress came together, Republicans and Democrats 
alike. More than 85 percent of the Republicans in the Senate in 1989 
supported legislation providing for two increases of 45 cents an hour 
each, to go into effect in 1990 and 1991.
  The President made the point that he is hopeful that now, with a 
Democratic President and Republican majorities in the House and Senate, 
we too would go forward on a bipartisan basis and vote for two similar 
45-cent increases.
  The legislation enacted in 1989 provided for a 45-cent increase in 
1990, and a 45-cent increase in 1991. And now the President is 
proposing a 45-cent increase for this year, 45 cents for next year.
  The economy is much stronger today than it was in 1989 when we last 
voted to increase the minimum wage. In the past 2 years, we have seen 
the creation of over 5 million jobs. Business profits are up. The 
wealthiest individuals are doing well, the top 20 percent. And what we 
are basically saying with the President's proposal to increase in the 
minimum wage is that men and women in this country who are prepared to 
work 40 hours a week, 52 weeks of the year, ought not to live in 
poverty. They ought to be able to earn a living wage. That is not such 
a radical concept or radical idea, Mr. President.
  The history of the minimum wage in this country teaches this very 
clearly. If we look at what the real value of the minimum wage has been 
and what the income needed to keep a family out of povery was from 1960 
right up to 1980, the minimum wage was a livable wage. It kept working 
families out of poverty. And what we are seeing now is that unless we 
act to increase the minimum wage, by next year, in real purchasing 
power, the minimum wage will be the lowest it has been in 40 years.
  What we are saying when we renew our commitment to a livable minimum 
wage is that work makes a difference. We ought to reward work in this 
country. We ought to say to families that we believe those who can and 
do and want to work and are working should be able to support 
themselves and their families and not be forced to rely on taxpayer-
financed safety net programs to feed, house and adequately provide for 
their families.
  If working people are not able to earn enough at the minimum wage to 
support their families, then it is other workers who in effect are 
called on to make up the difference through taxpayer- financed support 
programs. Thus, by raising the minimum wage, not only are we giving 
opportunity and prosperity to workers who want to work, we are also 
reducing, cutting the need to rely on public support programs.
  Mr. SIMON. Will the Senator yield?
  Mr. KENNEDY. Increasing the minimum wage will save taxpayer dollars 
because individuals will raise their incomes and no longer have to rely 
on the wide range of support programs which otherwise they are eligible 
for today. Increasing the minimum wage is a winning proposition for 
families that want to work, that will work. It is a winning proposition 
for taxpayers. It is a well-deserved increase.
  I will be glad to yield for a question.
  Mr. SIMON. Since the bottom fifth in terms of income in our country 
get 43 percent of the benefits from this, is it not true that if we 
were to raise the minimum wage as is suggested in this legislation, 
along the lines of what the Senator has just talked about, it probably 
would do more to provide real welfare reform than 90 percent of the 
talk of welfare reform that is going on around right now?
  Mr. KENNEDY. The Senator makes a very important point that has been 
reiterated in our recent Labor and Human Resources Committee hearings 
chaired by Senator Kassebaum on the 
[[Page S2079]] various job training programs. We heard testimony from a 
very distinguished professional from Arlington, VA, who said you cannot 
expect to move people out of welfare into jobs that pay less than $7 an 
hour, because people cannot afford the cost of housing, transportation, 
health care--or day care if they have children--at a lower wage. 
Therefore, there is very little incentive for people to move off 
welfare unless the job they are moving into pays a livable wage.
  Let me also point out this to the Senator from Illinois: The Senator 
is quite correct that 43 percent of the benefits of the last minimum 
wage increase went to families with earnings in the bottom 20 percent. 
But 45 percent of the benefits went to families with earnings in the 
middle 60 percent. Increasing the minimum wage is critically important 
to workers trying to support their families on a minimum wage job. But 
it is also a lifeline to families that are just on the border of middle 
income, and are dependent on the earning of someone who is working and 
supplementing the family's income with a minimum wage job to maintain 
their standard of living.
  Mr. SIMON. Mr. President, if I may ask one more question of the 
Senator? So this talk that when we raise the minimum wage, we are 
really just helping the teenagers of people who are well off, that 
really is a myth and has no substance in fact?
  Mr. KENNEDY. The Senator is quite correct. Two-thirds of those who 
are making the minimum wage today are adults--two-thirds.
  It is a reasonable ask what is going to be the impact of this 
increase on jobs in our country? I hope, over the course of both the 
debate on this issue and in the course of hearings, to have a chance to 
review the most recent studies. David Card and Alan Krueger, of 
Princeton Universit did a very interesting study. They studied the 
effects on employment on the fast food industry in New Jersey, 
resulting from the 1992 increase in the State minimum wage from $4.25 
to $5.05. This 80-cent increase in 1992 followed the 1990 increase in 
the Federal minimum wage from $3.35 to $3.80 and the 1991 increase of 
$3.80 to $4.25.
  We listened to the Governor of the State of New Jersey speak the 
other night in her response to the President's State of the Union 
message about how strong the economy in New Jersey. This is a State 
that had a 45-cent increase, another 45-cent increase, and then had an 
80-cent increase in the minimum wage after that, and the state economy 
is flourishing.
  And that was borne out by the Princeton economists' study. It found 
no negative impact on employment from the increase in the New Jersey 
State minimum wage to $5.05. And, interestingly, it showed some 
evidence of positive impact on employment. People who were outside the 
labor market came back because they could make a decent living. So they 
added to the economy. Rather than a reduction of jobs, it increased 
jobs.
  The Wessell study on the impact on restaurant employment of the 1990 
and 1991 increases in Federal minimum wage from $3.25 to $4.25 also 
found there was virtually no impact on employment.
  Similar results were found by Lawrence Katz of Harvard University and 
Alan Krueger of Princeton University, who did a 1992 study on 
employment in the fast food industry in Texas in 1990 and 1991 
following the last increase in the Federal minimum wage. They also 
found no significant impact on employment. So we have similar results 
from studies of the impact of minimum wage increases in an industrial 
State, New Jersey, and in the State of Texas.
  In addition, we have a 1992 study by Professor Card of the effects on 
teenage employment across 50 States resulting from the 1991 increase 
from $3.80 to $4.25. This study again found virtually no significant 
impact on teenage employment in low-wage as well as high-wage States.
  And this was found true as well in another study in that looked at 
changes in retail trade and teenage employment in California resulting 
from the 1988 increase in the State minimum wage from $3.25 to $4.35.
  We will hear a great deal during the course of the debate about the 
impact of minimum wage increases on employment. I think those issues 
are legitimate ones and have to be addressed. But any thoughtful and 
fair review of recent empirical evidence on the actual effect of 
minimum wage increases shows that the kind of increase proposed this 
morning by the President would have only a marginal, neglible effect on 
employment.
  Most of all, this issue is really about making work pay. It is a 
hollow argument indeed, to say this increase is going to mean a lesser 
life for working families in this country. We are talking about 
permitting working families to participate in the prosperity of 
America. This is a fair proposal. It ought to be treated fairly here in 
the Congress. I believe it ought to be part of the Contract With 
America.
  Profits are up. Wages across this country have been stagnant for most 
workers for many years. This is really a concrete effort to try to make 
a difference for working families, to give them a livable wage so they 
can live with respect and dignity, and with a real sense of hope for 
the future.
  I hope at the appropriate time we will have a chance to have further 
debate and take positive action, hopefully in a bipartisan way, in this 
body.


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