[Congressional Record Volume 142, Number 51 (Friday, April 19, 1996)]
[Extensions of Remarks]
[Pages E579-E580]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            THE MINIMUM WAGE

                                 ______


                          HON. LEE H. HAMILTON

                               of indiana

                    in the house of representatives

                        Thursday, April 18, 1996

  Mr. HAMILTON. Mr. Speaker, I would like to insert my Washington 
Report for Wednesday, April 17, 1996, into the Congressional Record.

                        Raising the Minimum Wage

       Rewarding work is a fundamental American value. There are 
     many ways to achieve that goal, including deficit reduction 
     to boost the economy, opening markets abroad to our products, 
     improving education and skills training, and investing in 
     technology and infrastructure. Increasing wages must be a 
     central objective of government policies.
       The economy is improving. It has in recent years reduced 
     the unemployment rate of 5.6%, cut the budget deficit nearly 
     in half, and spurred the creation of 8.4 million additional 
     jobs. Real hourly earning has now begun to rise modestly, and 
     the tax cut in 1993 for 15 million working families helped 
     spur economic growth.
       But much work needs to be done. We must build on the 
     successes of the last few years, and address the key 
     challenges facing our economy, including the problem of 
     stagnant wages. This problem will not be solved overnight, 
     but one action we can take immediately, and which I support, 
     is to raise the minimum wage.


                        raising the minimum wage

       The minimum wage was established in 1938 in an attempt to 
     assist the working poor, usually non-union workers with few 
     skills and little bargaining power. The wage has been 
     increased 17 times, from 25 cents per hour in 1938 to $4.25 
     per hour in 1991. Currently some 5 million people work for 
     wages at or below $4.25 per hour, and most of them are adults 
     rather than teenagers.

[[Page E580]]

       I support a proposal to increase the minimum wage 90 cents 
     over two years, from its current level of $4.25 per hour to 
     $5.15 per hour. The first 45 cents of the new increase would 
     not even restore the buying power the minimum wage has lost 
     since the last increase five years ago. Inflation has already 
     eaten away 81% of that increase. If we do not act to increase 
     the minimum wage this year, it will fall to a 40 year low in 
     terms of purchasing power.


                         who earns minimum wage

       The typical minimum wage worker is a white woman over age 
     20 working in the service sector or the retail industry. 
     About 60% of the minimum wage earners are women, and about 
     70% of the 12 million workers who would benefit from a 
     minimum wage increase--since their wages are less than 
     $5.15 per hour--are 20 years of age or older. The average 
     minimum wage worker brings home half of the family's 
     earnings, so an increase in the minimum wage can make a 
     real difference.
       An increase in the minimum wage would benefit over 315,000 
     Hoosiers, or 12.4% of the Indiana workforce, and would mean 
     an additional $1800 in earnings each year.


                             effect on jobs

       Opponents of a minimum wage increase claim that it will 
     wipe out jobs. But the weight of the evidence today supports 
     the conclusion that a moderate minimum wage increase would 
     not have a significant impact on job levels, because it would 
     help boost productivity and lower employee turnover. Over 100 
     economists, including several Nobel laureates, have urged the 
     President and Congress to approve a minimum wage increase and 
     have affirmed that it would not have a significant effect on 
     employment.
       Opponents of a minimum wage increase also criticize it as 
     being an inefficient way to alleviate poverty. In a sense 
     they are right. A minimum wage increase is not as well 
     targeted as the earned income tax credit, which directly 
     benefits low-paid workers either by cutting their taxes or, 
     if they owe no tax, giving them a check from the Treasury. 
     The credit is structured to encourage the poor to go to work 
     without hitting their employers. My view is that the best 
     anti-poverty strategy is probably to mix minimum wages with 
     tax credits.
       There are limits, however, to how much higher Congress can 
     push the tax credit. The problem, of course, with increases 
     in the earned income tax credit is that it costs the 
     government billions of dollars that it does not have, and 
     won't for many years. I do not, however, support efforts by 
     Speaker Gingrich to reduce the earned income tax credit.


                          a matter of fairness

       Surely we want to help ensure that people who work hard can 
     get ahead. Raising the income of America's lowest paid 
     workers is part of meeting that challenge. If we value work, 
     we ought to raise the value of the minimum wage. Most people 
     believe that somebody who works a 40-hour week ought to make 
     a wage they can live on. It is hard to believe that people 
     can oppose that notion.
       I have been particularly troubled by growing income 
     inequality in this country, an the declining value of the 
     minimum wage only contributes to that problem. For most of 
     the past four decades the minimum wage averaged between 45% 
     and 50% of the average hourly wage in the economy. After a 
     small gain in 1990 and 1991, the minimum wage has now dropped 
     to 38% of the average hourly wage.
       My view is that the minimum wage should be increased as a 
     simple matter of fairness to unskilled workers. These workers 
     are not protected by unions. They cannot and do not lobby 
     Congress. The minimum wage offers a margin of security to 
     those who want a job rather than a handout. For a rich 
     country like America, that's not too much to provide.
       I have been frustrated in Congress in recent weeks when we 
     were even denied an opportunity to vote on a raise in the 
     minimum wage. It is unfair to refuse to allow a vote on the 
     increase in the minimum wage, which is supported by 75% of 
     the American people.


                               conclusion

       I don't for a moment think that an increase in the minimum 
     wage is ultimately the cure for low working wages in this 
     country, but until we find an answer to that broader question 
     fundamental decency requires us to increase the income of the 
     lowest-income working Americans.
       I talked to a person earning minimum wage the other day. 
     When pay day comes, she is several days late on the rent, the 
     fuel tank on her automobile has to be filled, she is unable 
     to buy enough food, her family is not healthy and needs 
     medical help, and the utility companies are about ready to 
     shut the power off. She is faced with miserable choices. But 
     she said she was proud to be a working person, and only 
     wished she could make a living for her family.
       An increase in the minimum wage would help families get by. 
     It would reward work, giving 12 million workers a direct 
     increase, and it would be good for the American economy.

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