[Congressional Record Volume 141, Number 45 (Friday, March 10, 1995)]
[Senate]
[Page S3771]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                              MINIMUM WAGE

  Mr. SARBANES. Mr. President, the time is long overdue for the Federal 
Government to establish a realistic wage standard for the American 
worker. The real value of the minimum wage has deteriorated markedly 
since 1979. At its current level of $4.25 per hour, the minimum wage 
will fall to its lowest real value in 40 years if Congress fails to 
take action. In the late 1950's the real value of the minimum wage was 
worth more than $5 per hour by today's standards and in the mid-1960's 
it peaked at $6.28. However, because Congress has failed to respond to 
inflation over the last 20 years, the real value of the minimum wage is 
now 27 percent lower than it was in 1979, and has fallen by almost 50 
cents since 1991.
  The decrease in the value of the minimum wage has widened the gulf 
between rich and poor, making it even more difficult for hard-working 
families to make ends meet. In 1993, I strongly supported President 
Clinton's expansion of the earned income tax credit [EITC] which raised 
the income of 15 million households--helping many families rise above 
the poverty line. Today a family of four with one worker working year 
round, full-time at the current minimum wage would earn $8,500 and 
receive a tax credit of $3,400 for a total annual income of 
approximately $14,700. The Congressional Budget Office [CBO] estimates 
that in 1996 the poverty line for a family of four will be $16,092. 
Therefore, under the current minimum wage, workers can work full-time 
for an entire year and still fall $1,300 below the poverty line.
  One of the most common arguments put forth by opponents of the 
minimum wage is that an increase would ultimately rob the economy of 
jobs and income. The idea is that by increasing the minimum wage, 
businesses will have to pay fewer workers more, resulting in lower 
employment rates. Recent evidence has indicated that this argument is 
seriously flawed. A 1992 study by Princeton economists David Card and 
Alan Kruger in New Jersey found ``no evidence'' that a rise in New 
Jersey's minimum wage reduced employment. In fact, just the opposite 
was true. Card and Krueger's research indicates that ``the increase in 
the minimum wage increased employment.'' These findings were echoed by 
Nobel Prize winning Economics Professor Robert Solow of MIT when he 
stated, ``The main thing about minimum wage research is that the 
evidence of job loss is weak.''
  Mr. President, it is clear that the American economy can afford a 
reasonable increase in the minimum wage. In fact, it stands to reason 
that more money in the pocket of the American workers means that more 
money is being spent and purchasing power is increased. As Henry Ford 
so aptly stated, ``If you cut wages, you just cut the number of your 
customers.''
  In debating the economic value of this important policy decision, we 
must be careful not to overlook what I believe to be the heart of the 
matter--the American worker. Historically, Congress has acted to ensure 
minimum standards of decency for working Americans. Measures to protect 
workers from unsafe and unfair working conditions were enacted under 
the belief that, as a society, we should support a basic standard of 
living for all Americans. It is in this spirit that minimum wage laws 
have been updated through the years. It is my strongly held view that 
these actions appropriately reflect the values and beliefs at the very 
core of our society--the idea that if you work hard and play by the 
rules, you deserve the opportunity to get ahead.
  As long as we fail to act, we send the message to working families 
across the country that hard work and sound living is not enough. 
According to the Bureau of Labor Statistics, two-thirds of all minimum 
wage earners are adults who are struggling to achieve a decent standard 
of living for themselves and their families. The objective of the 
minimum wage is to make work pay well enough to keep families out of 
poverty and off Government assistance. An hourly rate of $4.25 is not 
enough to cover the average living expenses of a family of four. It is 
unthinkable to me that in what is arguably the wealthiest Nation in the 
world, there are families out there right now trying to choose between 
buying groceries for their children or heating their homes.
  As the Senate prepares to take up the debate on welfare reform, it is 
important to note that the Bureau of Labor Statistics estimates that 
three out of every five workers earning the minimum wage or below are 
women--and the current minimum wage falls significantly short of 
enabling single mothers to achieve self-sufficiency. How can a single 
mother be expected to be able to provide food, clothing, shelter, 
medical care, and child care on $4.25 an hour? In my view, instead of 
maintaining barriers to work, we should be helping to tear them down.
  Mr. President, Americans want to work. They want to be able to 
adequately provide for themselves and their families. But they are 
working for less and are becoming increasingly frustrated in the 
process. It is critical that we recognize the reality of minimum wage 
earners and take steps to help them rise above poverty. President 
Roosevelt once called for ``a fair day's pay for a fair day's work.'' 
The American worker deserves no less, and I urge my colleagues to join 
me in supporting efforts to increase the Federal minimum wage.


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