[Congressional Record Volume 142, Number 44 (Wednesday, March 27, 1996)]
[Senate]
[Pages S3005-S3006]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              MINIMUM WAGE

  Mr. SARBANES. Mr. President, I rise today to express my strong 
disappointment that the Republican leadership will not allow a straight 
up-or-down vote on legislation to increase the Federal minimum wage. 
The Congress is long overdue in acting upon legislation which would 
establish a more realistic wage standard for the American worker and I 
would hope that the Senate has the opportunity to express its will on 
this matter--one so critical to working families--in the near future.
  It would seem to me that the issue is a relatively simple one. As 
many of my colleagues will recall, under the Bush administration, the 
Senate voted overwhelming to enact an increase similar to the one being 
proposed today. In 1989, by a vote of 89-8, the Senate approved 
legislation which raised the minimum wage by 45 cents in 1990 and again 
in 1991 to bring it to its current level of $4.25 per hour. The 
proposal being put forth by myself and others would enact the same 
increase--45 cents this year and another 45 cents in 1997--raising the 
minimum wage to $5.15. It is my strongly held view that such an action, 
like that taken in the 101st Congress, would 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.
  In my own State of Maryland, the city of Baltimore has been at the 
forefront of efforts to assure hard-working Marylanders receive a 
decent living wage. Just last year, Baltimore's Mayor Kurt Schmoke 
signed the Nation's first prevailing wage law which stipulates that all 
new or renegotiated contracts with the city of Baltimore must provide a 
minimum wage of at least $6.10 per hour. Baltimore's ground-breaking 
public policy initiative should serve as an example to cities across 
the Nation and, in my view, provides an ideal model for the U.S. 
Congress.
  As we all well know, 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, Congress' failure to 
respond to inflation over the past 20 years has resulted in a 27-
percent decline in the real value of the minimum wage since 1979 and a 
50-cent drop since 1991. Since April 1991, the cost of living has risen 
11 percent while the minimum wage has remained constant at $4.25.
  The decrease in the value of the minimum wage has served to widen the 
gulf between the wealthiest and the poorest of our society. In an 
effort to offset this decline, I strongly supported President Clinton's 
expansion of the Earned Income Tax Credit [EITC] which raised the 
income of 15 million households--helping many rise above the poverty 
line. However, this is not enough. Even with the EITC expansion, a 
family of three with one full-time wage earner working year round at 
the current minimum wage brings home $8,500 and could receive a tax 
credit of $3,400 for a total annual income of $11,900. According to the 
Congressional Budget Office [CBO], the poverty level for a family of 
three in the United States stands at approximately $12,557. Therefore, 
at the current minimum wage, workers can work full-time for an entire 
year, qualify for the EITC and still fall some $657 below the poverty 
line. While the EITC is a critically important public policy initiative 
to assist low-income families, it should not be viewed as a substitute 
for a consistent, decent wage.
  Opponents of increasing the minimum wage frequently argue that the 
typical minimum wage earner is a teenager simply working after school 
or on the weekends to earn a little extra spending money and that the 
Government should not be supplementing the incomes of this

[[Page S3006]]

group of temporary, part-time workers. The truth, however, is that more 
than 70 percent of all minimum wage earners are adults over 19 years of 
age and the vast majority--58 percent--are women. Clearly, these are 
hard-working individuals trying to make a living and support a family 
on a wage that fails to allow them to even meet the poverty standard, 
let alone surpass it.
  At a time when salaries of CEO's of major companies have increased by 
more than 20 percent and the congressional leadership is talking about 
giving tax breaks to some of the most well-off in our Nation, I find it 
completely unreasonable that an attempt to increase this basic standard 
for the working poor would be resisted.
  Some argue that the economy cannot afford an increase in the minimum 
wage; that an increase in the minimum wage would ultimately rob the 
economy of jobs and income as businesses would be forced to pay fewer 
workers more. This is simply not true. A close review of recent 
evidence clearly demonstrates that a reasonable increase in the minimum 
wage does not result in huge job losses. A frequently cited 1992 study 
in which Princeton economists David Card and Alan Krueger examined the 
effects of a minimum wage increase in New Jersey found ``no evidence'' 
that a rise in New Jersey's minimum wage reduced employment 
opportunity. In fact, just the opposite was true. In comparing 
employment trends in New Jersey with those in Pennsylvania, Card and 
Krueger found the employment trends to be stronger in New Jersey, the 
State with the higher minimum wage. Similarly, Harvard economist 
Richard Freeman found in his 1994 study that ``moderate legislated 
increases did not reduce employment and were, if anything, associated 
with higher employment in some locales.''
  Mr. President, it is clear that the American economy cannot only 
afford a reasonable rise in the minimum wage, but could actually 
benefit from such an increase. In fact, it stands to reason that more 
money in the pocket of the American worker means that more money is 
being spent and purchasing power is increased. The minimum wage 
proposal now before us would give the American worker an additional 
$1,872 in annual income. In Maryland alone, it would mean an increase 
in income for more than 131,000 workers. It may not sound like much to 
some in this Chamber, but it can make all the difference to a family 
struggling to heat their home, pay for groceries, or provide adequate 
health care for their children.
  While economic considerations are an important aspect of this debate, 
neglecting to recognize the fundamental value of ensuring a living wage 
for American workers would compromise principles I believe to be 
integral to the fabric of our society. Historically, Congress has acted 
to guarantee 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.
  As long as we in Congress fail to act, we send the message to working 
families across the country that hard work and sound living are not 
enough. Nearly two-thirds of 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 three. It is unthinkable that in what is 
arguably the wealthiest Nation in the world, there are families out 
there right now having to choose between food for their children and 
heat for their homes. If a family of three can barely get by on $4.25 
an hour, how can a single mother--trying to stay off welfare--be 
expected to be able to provide food, clothing, shelter, medical care 
and child care on the current minimum wage? Instead of maintaining 
barriers to self-sufficiency, 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 harder 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. Many of those who supported the 
minimum wage increase in 1989 are here today and I would urge them to 
join me in calling for vote on this important measure.

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