[Congressional Record Volume 142, Number 53 (Tuesday, April 23, 1996)]
[House]
[Pages H3712-H3715]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        MORE ON THE MINIMUM WAGE

  The SPEAKER pro tempore (Mr. Collins of Georgia). Under the Speaker's 
announced policy of May 12, 1995, the gentleman from Texas [Mr. DeLay] 
is recognized for 60 minutes as the designee of the majority leader.
  Mr. DeLAY. Mr. Speaker, I take this special order to point out to the 
American people what we are going through, you just witnessed, here in 
the House. The liberal Democrats do not want to debate. They would not 
yield time even when they used a colleague's name and pulled out quotes 
of what a colleague has used on the floor. They did not even have the 
courtesy to debate that colleague because they know that they have 
taken the words of their colleagues and taken them out of context and 
twisted them.
  They are not the points that the colleagues were trying to make. They 
know it. That is why they will not yield to us. That is why they will 
not debate us. All they are doing is calling for a vote on minimum 
wage, and they really do not care about entry level workers or the poor 
in this country because, if they did, they would really want to debate 
this issue. But they do not want to debate. They want to get up and 
talk and talk and talk and talk, misrepresenting everything that these 
Members are doing down here, and trying to allow the American family to 
take home more pay by getting big government and Washington Government 
out of their pocket.

  Mr. Speaker, that is the way to help the American family in America, 
not some arbitrary Government-set wage and price controls that disrupts 
the market and actually puts people out of work and lowers the ability 
of people to create jobs, to put people to work.
  I yield to the gentleman from California [Mr. Dreier]. I am very 
happy to yield to the gentleman from California. Unfortunately, the 
liberal Democrats do not want to debate the gentleman from California.
  Mr. DREIER. Mr. Speaker, let me say to my very dear friend that this 
is a historic moment for me. I wondered if at any point in my life 
anyone from the well would in fact yield time to me. So we have gotten 
to that point, and I would like to express my gratitude and say that I 
plan to use it briefly but, I hope, very wisely. It is unfortunate, as 
my friend said, that on the other side of the aisle that our colleagues 
refuse to engage in any kind of discussion on this issue. They want to 
simply embark on a monolog.
  Mr. Speaker, if I could just take a couple of moments to respond to 
some of the preposterous claims that were made on the other side of the 
aisle. First let me offer a disclaimer and say that I concur with my 
friend who has worked long and hard on this issue that having a 
federally mandated minimum wage is in fact not a benefit to working 
Americans. In fact it is something that will jeopardize job creation 
and economic growth, something which we seek very sincerely.
  During this special order I did not hear this but it was just written 
down by one of our crack staff members on the floor. Our colleague from 
Connecticut reportedly said their taxes keep going up but their wages 
do not go up.
  The fact of the matter is we on this side of the aisle tried to help 
President Clinton comply with one of his campaign promises back in 1992 
by giving him an opportunity to reduce the tax burden on working 
Americans. We all know what happened with that opportunity that he had. 
He chose to veto that legislation and prevent those working Americans 
who, and the gentlewoman from Connecticut is absolutely right, saw 
their taxes keep going up, prevent them from having the chance, the 
chance to have a reduction.
  Mr. DeLAY. Not only did the President veto tax cuts for the American 
family, the people that have been calling the loudest for a minimum 
wage voted against tax cuts for the American family.
  Mr. DREIER. That is absolutely right. Those people who argue that 
their taxes keep going up are the ones who keep increasing their taxes 
as opposed to those of us who want to reduce that burden.
  The other thing that I found to be preposterous is that my friend 
from California proceeded to say that we now see the minimum wage at 
the lowest level in 40 years. Assuming that you are a strong supporter 
of increasing the minimum wage, the last time the minimum wage was 
increased was in 1989, and it was increased to $4.25 an hour.

[[Page H3713]]

  Mr. Speaker, now we know that the Democrats controlled this 
institution and the other body during the entire first 2 years of the 
Clinton administration. They had the opportunity, if they believed in 
increasing the minimum wage, to bring it up and it would sail right 
through this institution. But why did they not do it? They did not do 
it for several important reasons.
  Top advisors within that administration have made it very clear that 
they oppose increasing the minimum wage. Mr. Stiglitz, this was written 
up in the Wall Street Journal and has been said on several occasions, 
the chairman of the President's Council of Economic Advisors said a 
higher minimum wage does not seem to be a particularly useful way to 
help the poor. That is President Clinton's chairman of the Council of 
Economic Advisors.
  The President, who is one of the founders of the Democratic 
Leadership Council, regularly associates himself with them when he is 
trying to be on the sort of moderate to conservative side. They said 
increasing the minimum wage is the wrong strategy to promote the goals 
of helping people work their way out of poverty and raising living 
standards and in reducing inequality. So the fact of the matter is, 
while they say that we are responsible for not bringing this up and 
doing it in the way that they want, when they had the opportunity to 
deal with what they said has been the lowest wage in four decades, they 
clearly had that chance in the 103d Congress, they ignored it. And only 
a few months before this election, when they think that it is 
politically appealing, do they choose to come forward and say that this 
is a critical item when we know it is going to cost jobs.
  Mr. Speaker, I want to congratulate the majority whip for his fine 
efforts in trying to address this issue responsibly and soberly so that 
we can look at it and debate it, unlike our colleagues on the other 
side of the aisle.
  Mr. DeLAY. The gentleman from California is so right in what he says. 
This is the kind of thing that we have been going through for months 
now, if not for a solid year, of statements, commercials, moneys, 
millions and millions of dollars, talking about things like cutting 
Medicare when actually we are increasing the Medicare benefits to 
senior citizens, cutting school lunches.
  It was just said on the floor, just a minute ago, that we wanted to 
cut school lunches when in fact we were increasing the spending on 
school lunches and they just keep talking about it this way. They used 
a quote of mine, and I need to answer that. It is a true quote taken 
out of context. The quote was, as put up by their chart, but they 
refused to answer or refused to yield to me so that we could debate the 
issue, emotional appeals about working families trying to get by on 
$4.25 an hour are hard to resist.
  Mr. Speaker, let me put it in context of exactly what I wrote and 
sent to my colleagues in a dear colleague. What I wrote was, and I will 
read it so that people can understand it and there will not be any 
misrepresentation about what my position is. ``Supporters of raising 
the minimum wage argue that no one can afford to raise a family on 
$4.25 an hour. That may be true. However, their argument conveniently 
ignores the fact that no one actually has to.''
  As the table below shows, and I hold the table up that is in the 
piece, any parent who is earning the minimum wage is eligible for food 
stamps and earned income tax credit. They may also be eligible for 
other government programs such as Medicaid. Once these two benefits are 
added to the minimum wage, a single parent with one child has a total 
income of $5.76 an hour while a married couple with two children has a 
total income of $7.47 an hour. These amounts could be even higher 
depending on child care and housing expenses. As the chart shows, a 
married couple with one child on minimum wage makes $8,840 a year.

                              {time}  2000

  With EITC, the earned income tax credit, benefits, they pick up 
another $2,152. That is a direct tax credit that is refundable to them 
by the Federal Government. On food stamps they would pick up $2,142, 
for a total income of $13,134 amounting to $6.31 an hour. So when they 
trot out here and talk about $4.25 and American families trying to live 
on $4.25, they are misrepresenting the truth.
  The other part of this that they keep trotting out here is that, and 
I have heard it, different numbers used, is that in some cases they 
said that 65 percent of those on minimum wage are families and so 
forth. I would be willing to submit to this House a study done by the 
Employment Policies Institute that uses 1992 and 1994 census data that 
shows that 90 percent of the people on minimum wage are single, living 
with parents or, living with a relative, and what I cannot understand 
is where do they get these figures? Most people know that people living 
on minimum wage are people that are on the entry level, just coming 
into the job market, are usually single and usually living at home, and 
usually living at home, in many cases, living at home with parents that 
are doing quite well.
  This is not a debate. This is a dialog back and forth. You see where 
the liberal Democrats do not want to debate. What they want is to 
present a picture that is not exactly true. But we want the debate. We 
want to lay it out for the American people so that the American people 
know exactly what is going on with this political agenda of the liberal 
Democrats.
  As the gentleman from California has already pointed out, the 
Democrats have had control of the House and the Senate and the White 
House for 2 years, in 1993 and 1994, and they chose not to bring the 
minimum wage to the floor. But because they think this puts the 
Republicans in a politically vulnerable position, they are throwing up 
their hands and wailing and gnashing their teeth by calling for 
increasing the minimum wage. The minority party has made the minimum 
wage their cause celebre. They are fixated on a government mandate that 
most experts agree will kill jobs and kill opportunities for people who 
just want a chance to achieve the American dream.
  Proponents of increasing the minimum wage argue that work must pay, 
that the minimum wage is not a living ago. They argue that simply 
adjusting the minimum wage upward will help poor people out of poverty. 
They say that a family of four cannot afford to live on a wage that 
pays $4.25 an hour. Of course, they forget to tell you that a single 
parent with two children actually gets close to $7 an hour once you 
figure in EITC and food stamps, and that is only part of the 
intellectual dishonesty that surrounds this debate.

  The proposition to raise the minimum wage is fools' gold. It appeals 
to the naked eye, but upon closer inspection it is fraud, pure and 
simple.
  I am not an economist, so I will not give the economists' view of the 
mandated minimum wage, but I am a former small business owner, and I do 
understand the impact that this will have on entry level jobs. Raising 
the minimum wage will kill entry level jobs. Without entry level jobs, 
low-skilled and young workers cannot gain valuable work skills that 
will lead to later higher-wage positions.
  The liberal Democrats make the point as if people lived the rest of 
their lives making minimum wage. What usually happens is that it is the 
first job that you get, either as a teenager or right out of high 
school, and it is your first job right off of welfare, and that is your 
entry level job, and you gain skills by working on the job and then 
move on to higher pay. In life you have to learn, you must learn to 
crawl before you can walk, and you must walk before you can run. 
Similarly, you must gain experience doing the tough work before you can 
move on to better paying, more complex positions.
  Raising the minimum wage takes away that opportunity to realize the 
American dream for too many citizens. As a former small business owner, 
I know that raising the minimum wage will kill jobs. But do not just 
take my word for it. Bruce Johnston of the Chamber of Commerce said 
this:
  Raising the minimum wage is a recipe for more unemployment where 
America needs it the least, in inner-city neighborhoods and among the 
rural poor.
  In Europe, where they have huge and high minimum wages, they have 
locked in unemployment at 11 percent, at 15 percent, and, in Spain, 
about 20 percent. They have locked it in because they have set such a 
high wage that the people will not, and raised the labor costs so high 
that they will not

[[Page H3714]]

create jobs to bring on people in the entry-level positions.
  Joseph Stiglitz, who the gentleman from California has just quoted, 
the chairman, the chairman of President Clinton's Council on Economic 
Advisers, said this: ``A minimum wage does not seem to be a 
particularly useful way to help the poor.''
  The Democrat Leadership Council, a group often used by President 
Clinton to promote his themes, said in a statement, ``Increasing the 
minimum wage is the wrong strategy to promote the goals of helping 
people work their way out of poverty in raising living standards and in 
reducing inequality.'' And President Clinton, the President himself, 
has said raising the minimum wage is the wrong way to raise incomes of 
low-wage workers.
  Why is this the case? Why all of a sudden is the President interested 
in raising the minimum wage when he had the House and the Senate for 2 
whole years? All of a sudden in an election year, just 6 months before 
the November election, they have seen the light.
  Why is this the case? Why does not the minimum wage really work in 
helping low-wage workers? Here are some reasons:
  According to the Democrat Leadership Council, the President's own 
favorite think tank, the vast majority of minimum-wage workers are in 
families that do not need public wage supports because their incomes 
are well above the poverty level. Seventy percent of minimum-wage 
workers are families well above the poverty level, and nearly 40 
percent are in families with incomes of the top half, the top half of 
the Nation's income distribution.
  More than 75 percent of all poor Americans are ineligible for the 
minimum wage and would not benefit from an increase. These are people 
who do not get the minimum wage, for a variety of reasons, including 
they do not work, they already earn more than the minimum wage, but 
only work part of the year, or they may be self-employed, or they work 
in jobs not covered by minimum-wage law.
  The costs of an increase in the minimum wage would hit the poor the 
hardest.
  Now, this is coming from the Democrat Leadership Council, the 
President's think tank. The cost of an increase in the minimum wage 
would hit the poor the hardest. The vast majority of the poor and the 
poor families would have to pay higher prices brought on by an increase 
in the minimum wage. Increasing the minimum wage would produce a 
regressive transfer, making poor people a little worse off in order to 
improve the lives of people who are not poor.
  And I submit to my colleagues standing here on the floor of the House 
that one of the reasons that we are hearing all of this call for the 
minimum wage is because the Washington union bosses know that their 
contracts are coming up and most of their contracts are tied to the 
minimum wage. Therefore, if they can get the government to raise the 
minimum wage, they will be able to easily raise the wage to union 
workers.
  According to the Employment Policies Institute Foundation, if the 
Federal minimum wage were to increase to $5.15, America would lose 
625,600 jobs. Now, my friends, that means that there will be 625,000 
fewer opportunities for Americans to get a start on seizing the 
American dream.
  Some say that any negative impact on hiring is a small price to pay 
for higher wages. These are the people that claim that they work and 
protect the poor. They say that while we may hurt a few people, we will 
help many, many more. Well, unfortunately, the facts suggest otherwise. 
Even workers who keep their jobs after an increase in the minimum wage 
will be worse off.
  Workers are not paid solely in terms of cash wages. Even minimum-wage 
workers receive fringe benefits such as on-the-job training, flexible 
work schedules, commissions, bonuses, and employee discounts. When 
employers are forced to pay higher wages, they will have to reduce the 
value of these nonwage benefits in order to remain competitive.
  Students show that for every 10-percent increase in the minimum wage, 
workers are made 2 percent worse off. That means that the proposed 90 
cent increase in the minimum wage would reduce the other fringe 
benefits by $1.08. The affected workers would be 18 cents per hour in 
the hole after the Democrats get through with them. With friends like 
that, who needs enemies?
  But the worst part of this unfunded mandate is the impact on the 
underclass, the underprivileged, of this country. Raising the minimum 
wage expands the number of people in the underclass while killing 
opportunities for people to escape it.
  These are the people, the liberal Democrats, who voted and tried to 
kill welfare reform and said many, many times in the well of this House 
that our welfare reform that eliminates entitlements, saves money to 
taxpayers but, more importantly, forces welfare recipients to go to 
work cannot happen because there are no jobs out there. Yet, now get 
the irony of this, they are against welfare and asking able-bodied 
welfare recipients to stay on welfare because you cannot get off of 
welfare and go to work because there are no jobs out there, and then on 
the other hand they want to raise the minimum wage so that there are no 
jobs out there. And what happens, and what I know as a former business 
owner, I understand how businesses think.
  This is not helping. Raising the minimum wage is not opposed by small 
businesses because it helps small businesses keep wages low. The 
victims are the underprivileged. The victims are the people on welfare. 
They are the true victims because when the cost of labor goes up, which 
will happen when the minimum wage is increased, the small business 
owner will look for alternatives to remain competitive. Instead of 
hiring a person to wish dishes at a minimum wage, the small business 
could very well go buy a dishwasher if the price of that real person 
gets too high. That is how the market works.
  Now, if you want to, and I am trying to remember the quote: not to 
everyone according to their wants, but to everyone according to their 
needs, as the gentleman from California [Mr. Miller] suggests, is that 
the Government, or the market, should give different wages for 
different people. If he has three cooks working at the same restaurant, 
and one cook is single and one cook has a family with two children and 
one cook has a family with 11 children, yet they all three do the same 
job, they ought to be paid differently because they need more money. 
Then what would that do to our economy? What would that do to the 
opportunity of having more jobs for everyone out there to compete for? 
And what would that real person do?
  Well, if too many of these entry-level jobs are eliminated, that poor 
person might very well go on welfare, and instead of getting people off 
of welfare and working in entry-level jobs, gaining the experience and 
the knowhow necessary to make it to higher-paying jobs, we will have 
people enter the underclass unable to participate fully in our economy, 
and obviously the liberal Democrats want to keep them there. They want 
to keep them there.

                              {time}  2015

  In fact, according to a study of the Employment Policies Institute, 
based upon the Census, mothers on welfare in States that raised their 
minimum wage stayed on public assistance an average of 44 percent 
longer than welfare mothers living in States that did not raise their 
minimum wage.
  The gentleman from New Jersey was very eloquently talking about New 
Jersey has a real high minimum wage. They also have a huge welfare 
roll, because these jobs for entry level people, jobs that would be 
available for people who want to get off of welfare, are not there 
because labor costs are too high and artificially kept high because New 
Jersey's government decides that they will set the wages just by 
arbitrary means.
  If it makes sense to have a $6 minimum wage, why not have a $20 
minimum wage, and just raise it and let us all decide that we are all 
going to make the same thing. We are being accused, as Congressmen, for 
making too much money; that we are making $133,000 a year and we are 
against the minimum wage, how terrible that is. Well, we are in 
Congress. We work at a different job. What we want and what we feel 
strongly about are those that are in poverty, on welfare, and hopefully 
getting them to understand the

[[Page H3715]]

dignity and the self-esteem that is gained by holding a job. It is no 
small irony that the party that vetoed welfare reform now proposes to 
expand the welfare state by increasing the minimum wage.
  Mr. Speaker, I just urge the American people to take notice; liberal 
Democrats favor efforts that will expand the underclass while vetoing 
efforts to end it. I do not believe that the Federal Government should 
be actively limiting the opportunities of the American people.
  Of course, we should not be surprised by this newest policy 
initiative of the House Democrat Caucus. They make the Luddites look 
progressive in their economic theory. But the American people are tired 
of fighting over a shrinking pie. They want policies that will lead to 
a growing economy, better job opportunities, a greater chance to 
capture the American dream.
  It is not surprising that liberal Democrats are fighting for an 
increase in the minimum wage, just as they fight against comprehensive 
welfare reform; that they battle to preserve the welfare handouts while 
fighting against an economic growth agenda is part and parcel of their 
efforts to bring greater economic equality to the American society. 
This is no theory, this has been going on for years. Just look at 
history.
  But is equality of misery really better than the equality of 
opportunity? I do not think so. Fighting for greater opportunity means 
giving the private sector the tools to create jobs. It means lowering 
the costs of job creation, and it means encouraging small business 
expansion. Increasing the minimum wage has exactly the opposite effect. 
It takes away the important tools that create jobs. It increases the 
cost of job creation. It encourages small business retrenchment. It is 
simply the wrong answer.
  But the question remains, how do we increase opportunities for lower-
wage workers? Let me just sketch out briefly several ideas that would 
lead to a boom in economic growth and opportunity and more jobs 
available to those trying to come into the job market.
  Number one, enact commonsense regulatory reform. Reducing the costs 
of labor and capital will give companies more opportunities to pay the 
government less and their employees more. It will also lead to 
the creation of more small businesses and more jobs. Yet, that side of 
the aisle opposed us every step of the way on commonsense regulatory 
reform.

  Enact commonsense welfare reform. Welfare is now more profitable than 
work in most States across this country. In Hawaii, for example, the 
average welfare recipient receives the equivalent of $17.50 an hour. In 
my own State of Texas, that number is more than $7 an hour. But welfare 
is a dead-end road that leads not to the American dream, but to a 
nightmare of dependency and despair. Rewarding work, rather than 
welfare, is a necessary component to economic growth.
  Get rid of the Internal Revenue Service. There is no bigger job 
killer than the IRS. We need a simpler tax system that does not drain 
the critical resources away from businesses that can create jobs.
  Target relief for families. Give parents with children relief, to 
help them achieve certain acceptable standards, while maintaining job 
opportunities for those who simply want a chance at the American dream. 
By targeting subsidies to families who are supported by entry-level 
jobs, we would not put an unfunded government mandate on small 
businesses, but, rather, give a refund to parents who work hard to 
provide for their children. In fact, Republican proposals to enact the 
targeted relief will yield far greater benefits to working Americans 
than a simple mandate to raise the minimum wage; relief that goes on 
for years and years and years.
  Mr. Speaker, I just urge my colleagues who support the expansion of 
the Federal minimum wage for entry-level workers to rethink their 
position. Will an increase in the minimum wage help lower-wage workers? 
The answer is no. Will it improve American competitiveness across the 
world? The answer is no. Will it lead to greater economic growth? The 
answer is no. Will it increase opportunities for the poor? The answer 
is no. Will it help small businesses grow? The answer, once again, is 
no.
  Should we blindly increase the minimum wage to help Washington labor 
union bosses achieve their anti-growth goals? The answer is no. That 
leads me to the real reason why the Democrats are pushing for an 
increase in the minimum wage. The reason is pure partisan politics. Let 
there be no mistake about it; if big labor did not want a mandated 
minimum wage increase, we would not be discussing this issue today. 
Indeed, when Democrats ran the Congress and the White House a year and 
a half ago, they did not do anything to raise the minimum wage. Back 
then, they knew this would hurt job creation. Back then, they knew this 
would slow economic growth. Back then, they knew this was a misguided 
policy.
  But now, in this political year, with big labor giving them big money 
to buy big ads, we have this sudden push for an increase in the minimum 
wage. Mr. Speaker, a political payoff is a lousy reason to limit 
opportunities for entry-level workers, for poor workers. We must say no 
to the minimum wage increase. This is not the time for the United 
States to take away the American dream from so many people who just 
want a chance to achieve it.

                          ____________________