[Congressional Record Volume 142, Number 58 (Wednesday, May 1, 1996)]
[House]
[Pages H4372-H4373]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             WHAT BUSINESS SAYS ABOUT MINIMUM WAGE INCREASE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Arkansas [Mr. Dickey] is recognized for 5 minutes.
  Mr. DICKEY. Mr. Speaker, I would like to talk in opposition to the 
minimum wage increase from the standpoint of what business would have 
to say about this. I do not know if that has been brought into this 
discussion.
  Mr. Speaker, I am an employer, I am a restaurant owner, I own two 
different restaurants in Pine Bluff, AR, as well as being a politician. 
This is 100 percent politics that we are talking about here and not any 
of economy or not any from consideration of the people who are 
involved.
  I first want to say that the people who pay the price of the minimum 
wage are the consumers. They do it in one of two ways. They either pay 
a higher price or they pay with less service when they go to purchase 
things and they go into the marketplace.
  What people do not understand and what may need to be clarified in 
this discussion is what goes into the higher price. If you are in the 
restaurant business, you think, well, the labor that you have to pay is 
all that you would experience.

                              {time}  2015

  There is the tax, the additional tax, the payroll tax that comes from 
the additional pay. But there is also another factor, and it kind of 
compounds, and that is that the lettuce that is bought from the store 
or brought in is going to be at a higher cost because of the minimum 
wage. The meat, the condiments, all of the things that go into making 
the product are going to be higher.
  So the restaurant owner or the business owner is sitting, looking, 
and thinking, what is the consumer able to stand? The first reaction is 
that we need to cut the number of employees because we have got price 
as a barrier in so many instances. When that is the case, then they 
usually cut the most inexperienced employee, leaving the other 
employees more stressed and less able to handle the press of business.
  If that does not work and then you start adding back the employees, 
then you are faced with facing the consumer with a higher cost of the 
item. Now, when that happens, the consumer then has to deal with one or 
both of these issues, higher price or less service, and they then make 
choices that most of the time will bring about less sales.
  When you have less sales and you confirm that in an operation, and 
you do that on a month-to-month basis, you then start cutting employees 
because the sales are down. Now, that is what can happen, it probably 
will happen in this particular case, and it is not necessary.
  From the employee's standpoint, there is another viewpoint that needs 
to be looked at. The employees who are there know that when they come 
in to work at a minimum wage, that they are coming at a training wage, 
and that this is something where they probably are more of a liability 
to a business or an industry than they are an asset at the early 
stages. So they work up.
  When they work up and they try to progress in this area, they have to 
do it in relationship to other employees. So if you have an employee 
who is given a raise, that employee is compared to

[[Page H4373]]

others and there is kind of a standard that is set. If you have the 
Government coming in for the sake of politicians and just setting an 
automatic raise, you sort of disrupt all of that process.
  It also gives the employee the idea that this is all I am going to 
make, so we take away the incentive that they have for improving 
themselves, which the minimum wage, as it stands right now as a 
starting wage, as a training wage, is in fact an indicator or a 
starting place for the employees.

  So what I am really saying is no employer really wants his employees 
to stay on minimum wage. If they stay on minimum wage and they think 
that is all they are going to get until the politicians come and help 
them, they will not be committed to productivity, they will not be 
committed to improvement or achievement, and they will just sit there. 
When that happens, there is a staleness that takes place, and those 
employees that want to stay on minimum wage and they figure that is all 
they are going to do eventually need to be moved off the work force, 
because they are not responsive to the customer. Again, the customer is 
the king. He is the boss, and they are the people we are trying to 
please.
  There is also the employee who is remaining when the cutbacks come. 
They have to work under more stress and confusion, and that hinders and 
hurts the operations.
  Now, if you think through all of that and you assume all of that for 
the sake of this discussion as being true, coming from someone who is 
actually in the pits of working with consumers and with employees and 
trying to deal with all these forces, if those things are true, then 
what you have is a question of why in the world then do we do it?
  I have finally concluded that the liberals, the liberal politicians, 
are using this as a front, using the emotionalism of this issue as a 
front to charge more taxes, to take more money away from businesses, 
and that is wrong also. That has an effect.
  So these are the reasons for my being against raising the minimum 
wage.

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