[Congressional Record Volume 142, Number 73 (Wednesday, May 22, 1996)]
[House]
[Pages H5478-H5485]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               EMPLOYEE COMMUTING FLEXIBILITY ACT OF 1996

  Mr. GOODLING. Mr. Speaker, pursuant to House Resolution 440, I call 
up the bill (H.R. 1227) to amend the Portal-to-Portal Act of 1947 
relating to the payment of wages to employees who use employer owned 
vehicles, and ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to the rule, the committee 
amendment in the nature of a substitute, modified by the amendment 
printed in section 3 of House Resolution 440, is adopted.
  The text of the committee amendment in the nature of a substitute, as 
modified, is as follows:

                               H.R. 1227

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,
       Section 1. This Act may be cited as the ``Employee 
     Commuting flexibility Act of 1990''.

     SEC. 2. PROPER COMPENSATION FOR USE OF EMPLOYER VEHICLES.

       Section 4(a) of the Portal-to-Portal Act of 1947 (29 U.S.C. 
     254(a)) is amended by adding at the end of the following: 
     ``For purposes of this subsection, the use of an employer's 
     vehicle for travel by an employee and activities performed by 
     an employee which are incidental to the use of such vehicle 
     for commuting shall not be considered part of the employee's 
     principal activities if the use of such vehicle for travel is 
     within the normal communing area for the employer's business 
     or establishment and the use of the employer's vehicle is 
     subject to an agreement on the part of the employer and the 
     employee or representative of such employee.''.

     SEC. 3. EFFECTIVE DATE.

       The amendment made by section 1 shall take effect on the 
     date of the enactment of this Act and shall apply in 
     determining the application of section 4 of the Portal-to-
     Portal Act of 1947 to an employee in any civil action brought 
     before such date of enactment but pending on such date.

  The SPEAKER pro tempore. Under the rule the gentleman from 
Pennsylvania, [Mr. Goodling] and the gentleman from Missouri [Mr. Clay] 
will each control 45 minutes.
  Pusuant to the order of the House of today, the Chair intends to 
recognize the gentleman from Pennsylvania, [Mr. Goodling], and the 
gentleman from Missouri [Mr. Clay] for 15 minutes each, before 
postponing further consideration of the bill.
  The Chair recognizes the gentleman from Pennsylvania [Mr. Goodling].
  Mr. GOODLING. Mr. Speaker, I yield myself 1 minute.
  Mr. MILLER of California. Mr. Speaker, will the gentleman yield?
  Mr. GOODLING. I yield to the gentleman from California.
  Mr. MILLER of California. Mr. Speaker, the markup tomorrow on

[[Page H5479]]

IDEA, will that be postponed because of the consideration of H.R. 1227?
  Mr. GOODLING. Mr. Speaker, reclaiming my time, yes.
  Mr. Speaker, H.R. 1227, the Employer Commuter Flexibility Act, was 
reported favorably by voice vote from the Committee on Economic and 
Educational Opportunities, and I am pleased that we are considering it 
tonight. It was introduced and shepherded by the gentleman from 
Illinois [Mr. Fawell].
  It is a simple, straightforward bill. It would clarify the Portal-to-
Portal Act to assure that employees may use an employer provided 
vehicle to commute from the employee's home to the job site and back 
home without necessarily making the commuting time compensable under 
the Fair Labor Standards Act. The Department of Labor has issued 
inconsistent opinions, and employers and employees are ow uncertain as 
to whether such programs, which are mutually beneficial to employers 
and employees, can continue.
  Mr. Speaker, I yield 4 minutes to the gentleman from Illinois [Mr. 
Fawell] the author of the legislation.
  (Mr. FAWELL asked and was given permission to revise and extend his 
remarks.)
  Mr. FAWELL. Mr. Speaker, I rise in strong support of H.R. 1227, the 
Employee Commuting Flexibility Act. As the primary sponsor of the 
legislation, I want to take a moment to explain the need for, and the 
effect of the bill.
  H.R. 1227 would amend the Portal-to-Portal Act to clarify that 
commuting to and from work in employer-owned vehicles is not an 
activity for which an employee must be compensated. The need for such a 
clarification arose because the Department of Labor issued a misguided 
interpretation in the summer of 1994 which indicated that employees 
generally must be paid for time spent commuting between home and the 
job site in employer-owned vehicles. This is in contrast to employees 
commuting in their own vehicles who are not paid for commuting time.
  Needless to say, Mr. Speaker, this interpretation threatened to 
disturb the longstanding practice in the petroleum, construction, and 
other service industries where employees use company trucks and vans 
for commuting. I might add that the ability to use company vehicles is 
strongly desired by employees in these industries. Although the 
Department of Labor subsequently backed off somewhat from their 1994 
interpretation, a legislative clarification is necessary to avoid any 
future misinterpretation which could result in thousands of dollars of 
compensation claims against employers who allow employees to use 
company vehicles for commuting to and from work.
  Mr. Speaker, in the spirit of compromise, I have worked very closely 
with Congressman Rob Andrews in developing the final language of H.R. 
1227. The bill, which was reported by voice vote from both subcommittee 
and full committee, includes two important protections for employees. 
The bill clarifies that the use of employer-owned vehicles by employees 
solely for the purpose of traveling to and from work will not 
constitute a compensable activity, provided that, first, the travel is 
within the normal commuting area for the employer's business or 
establishment; and second, the use of the vehicle is the choice of the 
employee and is based on an agreement between the employer and the 
employee or the representative of the employee.
  Several of my colleagues have expressed concern that the legislation 
would somehow affect employee travel during the workday, such as 
between job sites. I want to make it very clear that the legislation 
will not affect any travel performed during the workday--it would still 
be a compensable activity under the provisions of H.R. 1227. Section 
4(a) of the Portal-to-Portal Act, which this bill amends, applies only 
to activities which occur prior to the time on any particular workday 
at which such employee commences, or subsequent to the time on any 
particular workday at which he ceases the principal activity or 
activities. Thus, it is not necessary to repeat in H.R. 1227 that the 
language only applies to travel time which occurs at the beginning and 
end of the workday.
  Mr. Speaker, I also want to take a moment to address several of the 
concerns which will be expressed by opponents of the legislation. 
First, they will claim that H.R. 1227 was originally described as 
seeking to do no more than codify the Department of Labor's April 1995 
opinion letter. H.R. 1227 was introduced in March 1995, 1 month before 
the second Department of Labor opinion letter was issued, and is 
intended to clarify what has become a murky area of the law because of 
the first Department of Labor opinion letter which was issued in August 
1994.
  Opponents of this common sense bill will also argue that we are 
somehow undermining the rights of employees by permitting employers to 
force employees to use an employer-provided vehicle. Under the Fair 
Labor Standards Act, an employee is not permitted to waive their 
rights, nor is the employee's representative allowed to bargain or 
negotiate away those rights. If either of these situations were 
possible, then the protections afforded by the act would be 
compromised.

  Hence the bill makes it clear that the use of the employer's vehicle 
is subject to an agreement between the employer and the employee or via 
a collective bargaining agreement. The ability of employees to use the 
employer's vehicle for traveling back and forth from home to work is 
voluntary in the sense that no employee must accept it. We did not, 
however, provide that the employee's use of the employer's vehicle 
could become a condition of employment. In some instances, it could, 
depending on the agreement between the employer and employee or the 
terms of a collective bargaining agreement.
  On another point, H.R. 1227 states that activities which are merely 
incidental to the use of an employer-provided vehicle for commuting at 
the beginning and end of the workday are not considered part of the 
employee's principal activity or activities and therefore need not be 
compensable. We expect that the Department of Labor will provide 
guidance in this area, consistent with the purposes of H.R. 1227.
  Communication between the employee and employer to receive 
assignments or instructions, or to transmit advice on work progress or 
completion, is required in order for these programs to exist. Likewise, 
routine vehicle safety inspections or other minor tasks have long been 
considered preliminary or postliminary activities and therefore not 
compensable. Merely transporting tools or supplies should not change 
the noncompensable nature of the travel.
  Opponents may also claim that the legislation enables employers to 
transfer to employees the costs of maintaining the employer's vehicle. 
It is our intent that the employee incur no out-of-pocket or direct 
cost for driving, parking, or otherwise maintaining the employer's 
vehicle in connection with commuting in employer-provided vehicles. 
However, the employer shall not be responsible for unrelated expenses, 
such as an employee's tax liability under the provisions of the 
Internal Revenue Code which may result from the employee's personal use 
of the employer's vehicle or for traffic violations resulting from the 
improper operation of the vehicle by the employee.
  Mr. Speaker, without belaboring the point, suffice to say the 
Employee Commuting Flexibility Act is a commonsense reform that I 
expect will receive broad support. In 99 out of 100 cases, employees 
enjoy the use of company vehicles to commute to and from their homes, 
as they have for many years, and have found it to be a convenient 
benefit that gives them great freedom in scheduling their workday. 
Employers too have appreciated the flexibility it gives them in 
scheduling work or deliveries for their customers.
  Mr. Speaker, there are many to thank who have had a hand in ensuring 
the success of this legislation, and would particularly like to thank 
Chairman Goodling for his support as this bill moved through the 
committee process; Congressman Cass Ballenger, the chairman of the 
Subcommittee on Workforce Protections, for hard work in moving the bill 
forward; and Congressman Rob Andrews for his long-time interest in this 
issue and for his cooperation and input in working to arrive at this 
compromise.
  The only way to permanently protect businesses and their employees 
from a misreading of the law is to clarify the statute to prevent any 
further confusion on this issue. H.R. 1227 will allow employers and 
employees to continue

[[Page H5480]]

to enjoy the mutual benefits which result from the use of employer-
provided vehicles for commuting. I urge my colleagues to support this 
commonsense reform legislation.

                              {time}  2030

  Mr. CLAY. Mr. Speaker, I yield myself 2 minutes.
  Mr. Speaker, our Nation is undergoing tremendous economic change. We 
are moving into an age of great global trade and technological 
advancement, yet until today, the 104th Congress, a Republican-led 
Congress, has refused to deal with the most basic challenge we face, 
making sure that low-wage workers are not left behind in this new ever-
expanding and ever-changing economy.
  In 1993 and 1994, President Clinton and the Democratic Congress 
worked hard to give working people a tax break through the earned 
income tax credit. This was a downpayment on our commitment to the 
principle that no one who works full time should live in poverty. The 
time has now come to pay the second installment on that 
commitment; to ensure that the minimum wage is a livable wage.
  The last time Congress voted to increase the minimum wage was in 
1989. Among the Republicans voting for the increase were the Speaker 
and the soon to be former majority leader in the Senate. Since 1989, 
the purchasing power of the minimum wage has declined to its lowest 
level in 40 years. The overwhelming majority of Americans, Mr. Speaker, 
support the President's call to increase the Federal minimum wage above 
its current rate of $4.25 an hour.
  My Republican colleagues are trapped on the wrong side of this issue. 
They are paralyzed by their own political and philosophical 
contradictions. The very same Republicans who call for drastic 
reductions in assistance to the working poor refuse to increase the 
minimum wage. Now that the Republican leadership can no longer resist 
the tide demanding a minimum wage increase, it has devised a political 
strategy to poison the water.
  If this House adopts the minimum wage amendment, as we should, we 
will then face amendments endorsed by the Republican leadership that 
will deny the minimum wage to as many as 10 million Americans. If the 
Goodling small business exemption passes, we will see the proliferation 
of sweatshops and the exploitation of farmworkers.
  Mr. Speaker, I ask my colleagues to reject this Goodling amendment.
  Mr. GOODLING. Mr. Speaker, I thought we were on portal to portal.
  Mr. Speaker, I yield 2 minutes to the gentleman from North Carolina, 
[Mr. Ballenger].
  Mr. BALLENGER. Mr. Speaker, I am speaking on portal to portal, and 
today I rise in strong support of the Employee Commuting Flexibility 
Act, which will allow employees to continue to use company vehicles for 
commuting. This has been a common practice throughout many service 
industries, where employees can use company vehicles to commute between 
their homes and the job site.
  In August of 1994, the Department of Labor took a position which 
penalized employers and employees who had worked out arrangements 
concerning the use of company vehicles. While the Department later 
backed away from that position, many employers are legitimately 
concerned about continuing to allow their employees to use company-
provided vehicles for commuting. Given that the Department has had two 
varying positions on this issue within a relatively short period of 
time, the Employee Commuting Flexibility Act provides much-needed 
clarification on the intention of the law concerning employee use of 
such vehicles.

  If employees must be paid for the time that they spend commuting to 
and from work each day, employers will be forced to eliminate these 
programs. Employees will then have to commute to work in their own 
personal vehicles. Not only will this be inconvenient for both parties, 
but for many employees it may mean the added financial burden of having 
to fuel, insure, and maintain their own vehicle for commuting.
  The Employee Commuting Flexibility Act will allow employers and 
employees to continue with such mutually beneficial arrangements, so 
long as the arrangement meets certain conditions. First, the use of the 
vehicle would be subject to an agreement between the employee and the 
employer. Second, the vehicle must be used for travel within the normal 
commuting area for the employer's business or establishment.
  The clarification provided by this legislation will enable employers 
and employees to continue with arrangements which meet these 
conditions. The employee receives the benefit of transportation and the 
company receives the benefit of the employee being able to go directly 
to the job site. Employees will not be exploited and the company will 
not be unduly burdened with expense. This is commonsense legislation 
and I urge my colleagues to support the bill.
  Mr. CLAY. Mr. Speaker, I yield 3 minutes to the gentleman from 
California, [Mr. Miller].
  (Mr. MILLER of California asked and was given permission to revise 
and extend his remarks.)
  Mr. MILLER of California. Mr. Speaker, the reason we are here today 
is because Americans working at the minimum wage need a raise. This is 
where they would be if the minimum wage were indexed for inflation; 
and, unfortunately, because it has not been raised, this is where 
American workers are today. They are back at a point where the minimum 
wage was many, many years ago in terms of its purchasing power.
  Finally, after months of struggle, we have persuaded the Republican 
leadership to bring the minimum wage to the floor of the House and they 
have finally agreed to do that. But only last night did we discover, as 
they seek to bring the minimum wage to the House for a vote, that they 
also will make in order amendments that will take away the benefits of 
the minimum wage and repeal the benefits of the minimum wage for up to 
10 million working Americans in this country who today work in some of 
the toughest occupations.
  These are the people who work in the fields that bring the food to 
our table. These are the people who wait on us when we go to dinner, 
when we go out to breakfast and when we go to lunch, who work long 
hours. These are the people who work in sweatshops making our garments.
  These are the people who will find, because of the nature of their 
employment, that they must move from job to job all of the time as the 
tasks change. They do not lack skills, they do not lack the ability or 
the desire to work, what they lack is the protection of the minimum 
wage if the Goodling amendment passes.
  So while we see the Republicans trying to pretend they are offering 
the minimum wage, what we see, in fact, is they have structured the 
debate, they have structured the rule, and they have structured the 
amendments to this bill so that, in fact, they will try to uncover tens 
of millions of Americans from the opportunity to earn a minimum wage.
  These are Americans who have chosen to go to work, who go to work 
every day, who end up at the end of the year poor, who end up at the 
end of the year eligible for food stamps, who end up at the end of the 
year eligible for housing, who end up at the end of the year eligible 
for the earned income tax credit. Why? Because through their labor they 
cannot earn a living wage. And now the Republicans seek to take that 
benefit away from up to 10 million Americans.
  These are women who are working hard to support their families, these 
are single parents who are working hard to support their families, 
these are students working while they are in school, while they are in 
high school and while in college, working 20, 30 hours a week. And the 
Republicans would deny them the benefits of the minimum wage. They 
would do it cleverly. They would do it cleverly by rolling back the 
benefits and the guaranties they have today that when they go to work 
they would get the minimum wage.
  The Goodling amendment must be rejected. We must have a clean up-or-
down vote on the minimum wage. It must be increased. These hard-working 
Americans who have chosen work over welfare are entitled to the 
benefits of their labor. We should no longer continue to subsidize 
those employers who simply choose not to pay the minimum wage.
  We just voted on an amendment that was to take care of the increased 
cost, if there are any, to paying the minimum wage for small 
businesses. Those

[[Page H5481]]

were the tax breaks that this House just overwhelmingly passed. But now 
what are they doing? Now they are trying to provide low-income labor to 
those very same employers. We should reject the Goodling amendment.
  Mr. GOODLING. Mr. Speaker, I yield myself 1 minute.
  The first statement I would like to make is that there were 2 years 
under the President's leadership when had a majority in the House and 
the Senate that he only mentioned the minimum wage during that entire 
time either in committee or by saying that raising the minimum wage 
does not help the working poor. So I want to make that clear.
  Second thing I want to make clear is, the $500,000 exemption has been 
something that has been a bipartisan effort for a long, long time. We 
have minimum wage exemptions. We have exemptions for small businesses 
in practically every piece of legislation, whether it is civil rights, 
whatever it may be. Those exemptions are in there.
  And I would point out again that Mr. Espy offered almost the same 
piece legislation. It was cosponsored by 60 Democrats and 90 
Republicans, some sitting in the audience right now who cosponsored it. 
I improved on it in making very, very sure, as a matter of fact, that 
it would not be retroactive; that we could not take money from those 
who presently had the money and are making those kind of wages. So I 
want to make very clear at this point.
  Mr. CLAY. Mr. Speaker, I yield 30 seconds to the gentleman from 
California [Mr. Miller].
  Mr. MILLER of California. Mr. Speaker, what should be made very clear 
is that after years of expanding the coverage of the minimum wage to 
hard working Americans in agriculture and sweatshops and other 
employment, what in fact we are now doing is rolling back and repealing 
the benefits of the minimum wage.
  So the gentleman is the first author of a minimum wage bill that is 
rolling back the benefits to people who are currently covered. All they 
have to do now is change their job and they lose the benefits of the 
minimum wage under his chairmanship.
  So the hallmark of this Republican Congress is they are uncovering 
hard working Americans who currently earn the minimum wage from the 
coverage of the minimum wage protection.
  Mr. GOODLING. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Kansas [Mrs. Meyers].
  Mrs. MEYERS of Kansas. Mr. Speaker, H.R. 1227 amends the Portal-to-
Portal Act to allow employees to use company vehicles for traveling 
back and forth to work. It is a simple bill, and frankly, addresses an 
issue which the Congress of the United States should not have to be 
involved in. Unfortunately, the Congress is increasingly forced to 
become involved in activities which historically have been left to 
employers and employees to decide. Misguided and confusing 
interpretations of current law issued by the Department of Labor have 
made this necessary.
  Many industries throughout the country provide company vehicles to 
employees for use during working hours, and allow the employee to use 
the vehicle to commute to and from work. This longstanding practice was 
threatened in 1994 when the Department of Labor decided that employees 
generally must be paid for the time spent commuting between home and 
the jobsite in employer-owned vehicles. Prior to this action, the long-
settled rule under the Portal-to-Portal Act had been that commuting 
time, whether in a personal or company vehicle, was not counted as 
hours worked. So, for many years, this was a nonissue. But after the 
Department's action--which it later rescinded and replaced with another 
opinion--confusion and lawsuits reign, and employees lose.
  Employees benefit by using a company vehicle to commute to and from 
work. It not only saves them time, but saves wear and tear on their own 
car, or allows another family member use of the car. Employees did not, 
and still do not, expect to be paid for driving back and forth to work.
  This bill ensures that employers who use company vehicles to commute 
to and from work are not ``on the clock'' so long as there is an 
agreement between the employer and the employee, and the commute is 
within a normal commuting distance. I urge all of my colleagues to 
support this commonsense measure.

                              {time}  2045

  Mr. CLAY. Mr. Speaker, I yield 3 minutes to the gentleman from New 
York Mr. [Owens].
  (Mr. OWENS asked and was given permission to revise and extend his 
remarks.)
  Mr. OWENS. Mr. Speaker, this Employee Commuting Act is a cheap device 
being utilized to sabotage the effort to increase the minimum wage by 
90 cents over a 2-year period. This Employee Commuting Act is one more 
attack on American working families. This is guerrilla warfare. It is 
an ambush of the workers. This bill forces workers to do work for which 
they are not paid. This bill allows employers to coerce employees into 
agreements to work without getting paid.
  The number of workers who drive vehicles to and from work that are 
owned by the company may be relatively small, but the principle here, 
the principle at stake here is monumental when you consider the 
implications of forcing people to work without getting paid.
  This act pilfers the wages of workers. This is a mandate for picking 
the pockets of defenseless workers.
  Against this petty thievery, Democrats must rise again to defend 
American working families. For some reason, during this whole year, the 
Republicans have waged an onslaught on working families. they have 
attacked OSHA for the safety of workers. They have tried to establish 
teams that would replace unions. They have attacked the National Labor 
Relations Board. They have attacked Davis-Bacon.
  For some reason the Republicans are determined to wipe out the gains 
that workers have made over the last 50 years. This is just one of many 
attacks. But this is a side attack, a guerrilla attack to pick the 
pockets. It is very petty but it is very damaging in terms of the 
precedent that it sets. If you let employers get away with forcing 
workers to work without getting paid on this occasion, on this 
particular set of circumstances, then you will do it again and again.
  The minimum wage is what they really want to get. They want to cloud 
the issue, confuse the American public. A mere 90 cents increase in the 
minimum wage over a 2-year period, that is what is at stake here. The 
Republicans want to declare war on working families, in this case when 
it does not even involve the budget of the Government.
  The Government will not be out one penny as a result of increasing 
the minimum wage. The minimum wage increase will not lead to a decrease 
in the number of jobs. The minimum wage has been increased in the State 
of New Jersey, and their industry has gone forward. They have more 
employment than ever before. They are prospering from the fact that 
they paying higher wages. Just as Social Security did not destroy the 
economy, just as the creation of the minimum wage bill, minimum wage 
act in the first place did not destroy the economy, just as all of the 
other benefits that workers have come to enjoy have not destroyed the 
economy but instead created a consumer class, a working class unlike 
anywhere else in the world, that has made our Nation prosper, the 
minimum wage will not hurt the economy.
  The minimum wage will help working people on the bottom who very much 
need a raise. Minimum wage will help those people that you are throwing 
off welfare into work because they will have an opportunity to work for 
a decent wage.
  America needs a raise and it needs it right now. We do not need these 
kinds of actions. The portal to portal bill takes wages out of the 
pockets of workers. I urge Members to reject this Employee Flexibility 
Act.
  Mr. CLAY. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Georgia [Ms. McKinney].
  Ms. McKINNEY. Mr. Speaker, I take this opportunity tonight to oppose 
the Gingrich-Goodling amendment. I suppose we should have expected that 
the Republican leadership would not allow a vote to increase the 
minimum wage without first giving away the farm. The Gingrich-Goodling 
amendment, Mr. Speaker, would deny nearly 10 million American workers 
the right to

[[Page H5482]]

earn the minimum wage and overtime pay, even though these workers have 
those rights today. Only in a Republican controlled Congress would we 
vote to increase the minimum wage 1 minute, then make 10 million 
workers ineligible for it in the next minute.
  This amendment, Mr. Speaker, is little more than a cruel and cynical 
joke made at the expense of millions of working families. I urge my 
colleagues who support the minimum wage increase to oppose this 
antiworker amendment. From folks who oppose even the concept of a 
minimum wage, we really should not expect any better.
  Mr. CLAY. Mr. Speaker, I yield 3 minutes to the gentleman from Texas 
[Mr. Gene Green].
  (Mr. GENE GREEN of Texas asked and was given permission to revise and 
extend his remarks.)
  Mr. GENE GREEN of Texas. Mr. Speaker, our chairman is correct that we 
are debating H.R. 1227. That is the vehicle that is being used tonight 
and tomorrow to debate the minimum wage increase. After months of 
blocking Democratic attempts to vote on raising the minimum wage, 
Republicans have finally allowed a vote on the issue. But this move is 
not really intended to help those hard-working Americans. Republicans 
will attach this minimum wage increase to a proposal that is nothing 
but an attempt to satisfy special interest groups who join them in the 
months-long battle against raising the minimum wage.
  The 80 percent of the American people who support a minimum wage need 
to know that the legislative vehicle that is being used today will 
exempt millions of hard-working people from the minimum wage and 
overtime pay. That is right, over 10 million people will not be 
eligible for a minimum wage increase. This is the Washington way of 
giving it to you with one hand and taking it away with the other.
  Mr. Speaker, it is obvious that the Republicans really have no 
interest in providing working Americans the opportunity of a living 
wage. We should not allow this sham, this gimmick, this fraud on these 
lowest paid hard-working American workers. Republicans do not care that 
the minimum wage has been on a fairly steady decline for the past 15 
years. Today the minimum wage has fallen 45 cents in real value since 
the last increase in 1991. Five years ago there was the last minimum 
wage increase, and yet we have not seen an increase, and now we see 
this sham tonight.
  Americans know that the real families exist on the minimum wage. It 
is hard to get by, when working full time does not even put enough 
money to stay off welfare. You have to earn money in your pocketbook to 
put food on the table. That is why Americans, 80 percent support an 
increase in the minimum wage. Republicans have a golden opportunity to 
give these hard-working Americans a clean minimum wage increase, but 
not if we adopt the Goodling amendment.
  Mr. Speaker, I hope that we will have a clean minimum wage increase 
that will give these hard-working people an increase without exempting 
10 million people from the minimum wage and also from the overtime 
protections that they have now.
  Mr. GOODLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Indiana [Mr. McIntosh].
  Mr. McINTOSH. Mr. Speaker, I rise in opposition to the effort to 
mandate a raise of the minimum wage because I think this effort, 
although it appears to be well-intended, ignores what I refer to as the 
victims of minimum wage folly. In my subcommittee, we held hearings 
last week in which we heard from experts, economists and real people 
who will be living with this law. I will insert the testimony into the 
Record.
  Let me introduce you to two of the victims of this minimum wage 
folly. One of them is a woman named Melody Rane and her family. They 
have a family-owned Burger King in Eureka, CA. She will have to let off 
four full-time workers and eight part-time workers if we mandate an 
increase in the minimum wage.
  Most of her workers do not stay on minimum wage. They come in 
untrained. They start at minimum wage. And within 6 months are making 
much, much more than minimum wage. But because of our mandate, she will 
have to reduce her employment, have fewer opportunities for some of the 
most vulnerable members of our society.
  A second such person is at the far end, his name is Don Baisch. Don 
is pictured with his daughter Maya. Three years ago Don was on welfare. 
He did not have a job. Melody gave him his first job at her Burger 
King. He started out on minimum wage. Now 3 years later, Don is a 
working dad, supporting his daughter Maya as a manager in Melody's 
store.
  He came and said:

       Mr. Congressman, please do not raise the minimum wage 
     because there are going to be future people just like me who 
     will not have a chance to get off welfare. You think you may 
     be doing the right thing, but for them it is wrong, and it 
     will hurt them and deprive them of a chance to have a job.

  We need to do what is right for working men and women. Tomorrow I 
will discuss a better way, a minimum wage tax cut. Unfortunately, we 
cannot vote on it, but let us not harm these people.
  Mr. Speaker, I include for the Record the following information:

Testimony Before the Subcommittee on National Economic Growth, Natural 
        Resources, and Regulatory Affairs--Tuesday, May 14, 1996


            statement of melody rane, Burger King Franchise

       Good morning. My name is Melody Rane and I am the mother of 
     four children and, together with my husband, Jay, am the 
     owner of two Burger King restaurants in Eureka and 
     McKinleyville, California. I'd like to thank the Subcommittee 
     for the opportunity to express, as a small business person, 
     how the proposed increase in the minimum wage would affect 
     our business and, most importantly, the young people we 
     employ.
       I have provided the Subcommittee with a written calculation 
     of what the actual cost of the proposed minimum wage increase 
     would be to our business. As you can see, our labor costs 
     would increase by over $100,000.00 per year. This is more 
     than we took together as a salary from our business last 
     year, before taxes. Clearly, we simply could not absorb this 
     loss, so would be faced with the following choices: 1) 
     increase our prices (which would be against our better 
     judgment, since reducing our Whopper to $.99 and selling meal 
     combos three years ago has increased our sales by 30% and our 
     profits by 15%); 2) lay off employees; or 3) increase prices 
     moderately, so we can retain business, while laying off 
     employees. The logical choice, and the one we would plan on 
     executing, is the third. My guess is that most business 
     owners would do the same, which would cause inflation--and 
     then what good have we done anyone?
       My biggest concern--and the reason I am here today--is the 
     jobs for our youth. As a mother of three teenage sons, I 
     think it is very important for these young people to 
     experience working at a job where they can learn the 
     importance of being productive members of our society. As you 
     can see from my calculation, a lot of jobs would be lost from 
     a minimum wage increase, just in our franchise alone. Our 
     solution will be to raise prices for half of the increase and 
     lay off workers for the other half. I will have to lay off 
     a total of 4 full time workers or 8 part time workers. 
     There are about 6,000 franchised Burger King restaurants 
     in the United States, which would equate to an estimated 
     24,000 full time jobs or 48,000 part time jobs. We would 
     be forced to layoff teenagers mostly, as they are almost 
     always inexperienced and require more of the Manager's 
     time to teach them good work ethics. Only the most 
     productive and hard working people would survive the cut, 
     because we would have to give the same service with less 
     people.
       When we first started our business 15 years ago, it took 16 
     to 18 people to work a busy Saturday lunch rush. Now, we use 
     12 to 14. With the last minimum wage increase, we went to 
     self-service drinks. There is no avoiding the fact that a 
     further minimum wage increase would mean even fewer job 
     opportunities in our restaurants.
       My point is that the minimum wage may be $4.25, but it is 
     only a starting wage. My average hourly rate is $5.10 per 
     hour today, and my fellow franchisees around the country also 
     have comparable average wages, some much higher. Why not 
     leave what's working alone and let the market drive the 
     wages? A large number of the franchisees can't even get 
     employees to come and work for $6.00 an hour, because often 
     we are competing with the welfare system. What incentive does 
     a person have to work a minimum wage job, whether it is at 
     $4.25 an hour or $5.25 an hour, if they can make two or three 
     times as much on welfare and not work at all?
       I have asked an employee of ours to join me here and tell 
     you his story. He was on welfare when he started working for 
     us at the minimum wage. Now, he's a Manager for us making 
     almost $20,000 a year. How many people will not get the 
     opportunity he did if jobs are cut? In fact, every one of our 
     managers started with us as an hourly employee with no 
     experience making the minimum wage. Who stays at the minimum 
     wage all their life?
       It upsets us to see the media and others portraying small 
     business owners as heartless people who care nothing about 
     employees. I am very proud of the hundreds of young people 
     who have worked for us

[[Page H5483]]

     through the years that go on and get bigger and better jobs. 
     The real satisfaction we get is when they come back and thank 
     us for the lessons we taught them about working, and how we 
     made a difference in their lives.
       In closing, I would just like to say that our industry 
     serves a valuable purpose--we are the first rung on the 
     ladder for many workers. We take pride in seeing them 
     progress to the next, and the next, whether it be with us or 
     with someone else.
       Thank you.


    statement of don baisch, manager, eureka burger king restaurant

       I was hired to work at the Eureka Burger King in May of 
     1993. I started at $4.25 an hour and after a few weeks I had 
     proven myself to the management and was given a $.50 raise. 
     Because of a rocky relationship with my wife, I quit and was 
     rehired a few times, but when I found out that we were going 
     to have a baby, I started getting serious about my job.
       The manager wanted me to work more hours, but because I was 
     on welfare and receiving financial assistance, my case worker 
     told me that until the baby was born I could only work 25 
     hours a week or I would lose some of my benefits. After my 
     daughter was born in March of 1994, I was allowed to work 
     full time and I accepted a promotion to Crew Leader, starting 
     at $5.25 an hour. A Crew Leader helps the manager on duty by 
     making sure all the food prep is done, the breaks are all 
     given out and that all cleaning list and check lists are 
     done.
       About 8 months after I became a Crew Leader I was offered 
     an Assistant Manager job. I talked to my case worker to see 
     what benefits I would lose, and she said that we would lose 
     all of our benefits. Furthermore, she said that if the job 
     didn't work out, we would have to reapply for all of our 
     benefits again, which could take months. That did it for my 
     wife--she refused to let me take the job. A few months later, 
     in March of 1995, my wife and I split up and the Assistant 
     Manager job was offered to me again. This time I took it.
       Jay and Melody had to start me out at $1400.00 a month 
     (this was $200.00 more a month than they normally started 
     inexperienced managers) just to match my Crew Leader pay and 
     what I was receiving from welfare. The welfare system, at 
     least in Humboldt County, discourages you from tying to get 
     ahead. In fact, it discourages couples from getting married, 
     because you can get more benefits if you are single, and the 
     case workers tell you that. There needs to be a better way. 
     They should gradually take it away, until you are finally on 
     your own.
       Jay and Melody, the managers and co-workers at Burger King 
     believed in me and saw what I could not see anymore in 
     myself, and I am very thankful for their help. Thanks to a 
     minimum wage job opportunity, I am completely off of welfare 
     now, and I have a self-esteem and pride again. I hope you 
     think carefully about increasing the minimum wage, because it 
     will provide less opportunities for people like me to turn 
     their lives around.

                           APRIL 1-30 PAYROLLS                          
              (1 High Volume Store, 1 Average Volume Store)             
------------------------------------------------------------------------
                                                   Gross     Avg. Hourly
                                     Hours (a)  Hourly Pay      Wage    
                                                    (b)     (ba)
------------------------------------------------------------------------
Eureka............................       4,276     $21,787        $5.09 
McKinleyville \1\.................       3,314     $16,228        $4.89 
------------------------------------------------------------------------
\1\ The McKinleyville store has a lower average hourly wage because it  
  just opened in Oct. of 95. As the employees gain experience and get   
  more raises this number will catch up with the Eureka store.          

       After a minimum wage increase of $1.00 per hour:
       Eureka--4,276 hrs$6.09=$26,041 an increase of $4,254.00 a 
     mo.
       McKinleyville--3,314 hrs$5.89=$19,519 an increase of 
     $3,291.00 a mo.
       Total Payroll Increase for the month=$7,545.00.
       Wage Increase12=$90,540.
       Added Employer FICA=$6,926 (7.65%).
       Added Workers Comp=$3,395 (3.75%).
       Total W/Added Taxes $100,861 and Insurance.


                       questions for melody rane

       1. Roughly, how many people have you given a start with a 
     minimum wage job?
       2. What do you think will happen to those employees you 
     will have to lay off if there is a minimum wage increase?
       3. Do you expect other fast food chains around the country 
     will have to do the same? [If so, your estimate that 24,000 
     full time employees or 48,000 part time employees will be 
     laid off in Burger King restaurants can be multiplied many 
     times for a grand total job loss in the fast food industry.]


                        questions for don baisch

       1. Have you ever regretted taking your job at Burger King 
     and getting off welfare benefits?
       2. Do you believe welfare case workers discourage others 
     from taking jobs so they can keep their benefits, like they 
     did for you?
       3. Do you believe that minimum wage jobs offer other people 
     the same opportunities for success that your job at Burger 
     King offered you?

             [From the Wall Street Journal, Apr. 16, 1996]

                         The Minimum Wage Trap

                          (By Bruce Bartlett)

       President Clinton is asking Congress to raise the minimum 
     wage by 90 cents over two years to $5.15 per hour, a 21% 
     increase. In doing so, the president has challenged the 
     widespread view among economists that an increase in the 
     minimum wage will reduce jobs.
       In 1981, the congressionally mandated Minimum Wage Study 
     Commission concluded that a 10% increase in the minimum wage 
     reduced teenage employment by between 1% and 3%. This 
     suggests that between 130,000 and 400,000 jobs would be lost 
     if the Clinton plan is approved by Congress. This estimate is 
     confirmed in two more recent studies, by David Neumark of 
     Michigan State and William Wascher of the Federal Reserve 
     Board, and by Kevin Murphy of the University of Chicago and 
     Donald Deere and Finis Welch, both of Texas A&M.
       The Clinton administration counters by referring to the 
     recent work of economists David Card and Alan Krueger, both 
     of Princeton. Their studies of fast food restaurant 
     employment in New Jersey and California after those states 
     increased their state minimum wages found no evidence of job 
     loss.


                              flawed data

       However, flaws in the Card-Krueger data cast serious doubt 
     on the validity of their conclusions. In a paper published by 
     the National Bureau of Economic Research, Messrs. Neumark and 
     Wascher reexamined the Card-Krueger data, which originally 
     came from telephone surveys. Using payroll records from a 
     sample of the same New Jersey and Pennsylvania restaurants, 
     Messrs. Neumark and Washer found that employment had not 
     risen after an increase in the minimum wage, as Messrs. Card 
     and Krueger had claimed, but in fact had fallen.
       A review of Mr. Card's study of California by Lowell Taylor 
     of Carnegie Mellon University found that the state minimum 
     wage increase had a major negative effect in low-wage 
     counties and for retail establishments generally. Thus Nobel 
     Prize-winning economist Gary Becker of the University of 
     Chicago concluded that ``the Card-Krueger studies are flawed 
     and cannot justify going against the accumulated evidence 
     from many past and present studies that find sizable negative 
     effects of higher minimums on employment.''
       The fact is that virtually every major study that has ever 
     been done has found significant job losses from an increase 
     in the minimum wage, with the rare exception of those done by 
     Messrs: Card and Krueger. (Mr. Krueger formerly served as 
     chief economist for the Labor Department in the Clinton 
     administration.) A survey of earlier studies by the General 
     Accounting Office in 1983, for example, ``found virtually 
     total agreement that employment is lower than it would have 
     been if no minimum wage existed.''
       But even if the minimum wage had no effect on overall 
     employment, there are still strong arguments against raising 
     it. First, it is important to understand that the impact of 
     the minimum wage is not uniform. For 98.2% of wage and salary 
     workers, there is no impact at all, because they either 
     already earn more than the minimum or are not covered by it. 
     However, for workers in low-wage industries, those without 
     skills, members of minority groups and those living in areas 
     of the country where wages tend to be lower, the impact can 
     be severe. This is why economists have always found that the 
     primary impact of the minimum wage has been on black 
     teenagers.
       In 1948, when the minimum wage covered a much smaller 
     portion of the labor force, the unemployment rate for black 
     males age 16 and 17 was just 9.4%, while the comparable 
     unemployment rate for whites was 10.2%. In 1995, unemployment 
     among black teenage males was 37.1%, while the unemployment 
     rate for white teenage males was 15.6%. Moreover, the 
     unemployment rate for black teenage males has tended to rise 
     and fall with changes in the real minimum wage.
       But current unemployment is just a part of the long-term 
     price that entry-level workers of all races pay for the 
     minimum wage. A number of studies have shown that increases 
     in the minimum wage lead employers to cut back on both work 
     hours and training. When combined with the loss of job 
     opportunities, this means that many youths, especially among 
     minorities, are prevented from reaching the first rung on the 
     ladder of success, with consequences that can last a 
     lifetime.
       When people cannot get legitimate jobs, it is not 
     surprising that they turn to crime and the underground 
     economy. Studies by Massanori Hashimoto of Ohio State and 
     Liad Phillips of the University of California, Santa Barbara, 
     both show that increases in the minimum wage contribute to 
     teenage crime. And a study by William Beranek of the 
     University of Georgia found that the minimum wage encourages 
     employment of illegal aliens, who are unlikely to report any 
     violations of the Fair Labor Standards Act to the Labor 
     Department.
       Research also shows that the minimum wage is a significant 
     factor in welfare dependency. A recent study by Peter Brandon 
     of the University of Wisconsin, for example, examined welfare 
     rates in states that increased their minimum wages in the 
     1980s with those that did not. In those that did, the average 
     time on welfare was 44% longer than in states that did not. 
     This is largely due to reduced employment opportunities for 
     welfare mothers. In states not raising the minimum wage, half 
     of welfare mothers worked during the years surveyed, while in 
     states that raised the minimum wage only 40% reported 
     working.
       Intuitively, one would have expected a higher minimum wage 
     to make work more

[[Page H5484]]

     rewarding for those on welfare. However, the interaction of 
     the welfare and tax systems means that some working people 
     are actually worse off after an increase in the minimum wage. 
     Economist Carlos Bonilla of the Employment Policies 
     Institute, an industry-funded group on Washington, D.C., 
     found a dramatic example of this in California after its 
     minimum wage rose to $4.25 from $3.35. After accounting for 
     the phase-out of Aid to Families With Dependent Children, 
     Medicaid and food stamps, and for federal, state and local 
     taxes, Mr. Bonilla found that a single parent earning the 
     minimum wage was $1,800 per year worse off after the 
     increase.
       Finally, the latest research shows that increases in the 
     minimum wage encourage high school students to drop out, 
     enticed by the lure of higher pay for unskilled work. This 
     has the effect of reducing their lifetime earnings and 
     displacing lower-skilled older workers at the same time.


                             little impact

       Given these kinds of effects, it is not surprising, 
     therefore, that the minimum wage, has almost no broad impact 
     on poverty or the incomes of the poor. Although some poor 
     people are better off because they get higher wages, others 
     are worse off because they lose their jobs. Thus one study 
     found that the 22% increase in the minimum wage in 1976 added 
     just $200 million to the aggregate income of those in the 
     lowest 10% of the income distribution. Indeed, much of the 
     benefit of the minimum wage actually goes to the well-off, 
     whose children get paid more for part-time work.
       Moreover, although proponents of a high minimum wage often 
     talk about the difficulty of supporting a family on the 
     minimum wage, only a very small number of workers earning the 
     minimum wage actually do so. In 1993 only 22,000 men and 
     191,000 women nationwide maintained families on a minimum 
     wage job, according to the Bureau of Labor Statistics. 
     According to BLS data for 1985, 37% of minimum-wage workers 
     were teenagers, probably living at home, and 59% were age 24 
     or younger. About 17% of minimum-wage workers are wives, and 
     thus likely to be secondary earners, and 66% only work part 
     time. These include students, the elderly with pension or 
     Social Security income, and those simply looking for a little 
     extra cash.
       The case against the minimum wage is strong. In fact, the 
     minimum wage should be abolished. Even the liberal New York 
     Times has said so. As the headline on its Jan. 14, 1987, lead 
     editorial put it: ``The Right Minimum Wage: $0.00.'' Indeed, 
     according to Robert Meyer of the University of Chicago and 
     David Wise of Harvard, abolition would actually increase the 
     aggregate income of youth in this country. Raising the 
     minimum wage simply moves us further in the wrong direction.

  Mr. CLAY. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
North Carolina [Mrs. Clayton].
  Mrs. CLAYTON. Mr. Speaker, one is asked, why do we need a minimum 
wage? I just heard the reference to victims. I gather these people feel 
that they need the minimum wage, and 80 percent of the American people 
feel they need to increase the minimum wage.
  First you need to increase the minimum wage because it is the fair 
thing to do. It is indeed fair to say that those who are employed at 
the lowest level are also employed at a livable wage. It says something 
about our economy.
  Why is a livable wage needed? Well, it is needed to provide the very 
basic essentials of living: a shelter, food on the table, clean 
clothes, being able to take care of medical expenses, transportation, 
all those things that a human being needs to exist.
  Again, we heard reference to the teenagers who are on the minimum 
wage. I would suggest to you there indeed are teenagers who are on the 
minimum wage, but they are supplementing their family's income. Many of 
them are working their way through college. Indeed, they have a right, 
as I have suggested to you, as the adults have in making a livable 
wage.
  The adults are mostly women, single women heads of households who 
have a sole responsibility for their families. So who will be helped? A 
lot of people will be helped, if indeed we raise the minimum wage.
  What are the Republicans doing? What is their answer to America's cry 
that we want to be fair, that we want to have an economy that says the 
least among us should have a livable wage and that the minimum wage 
should be increased. They put a minimum wage bill before this House, 
but yet they encumber it with the amendment that the gentleman from 
Pennsylvania [Mr. Goodling] has.
  Indeed, this is a unique way to offer something by offering it and 
taking it back. Indeed, now more than 10 million people who were 
covered under the 1991 increase in the minimum wage will not now be 
covered. In fact, the current law covers at least 10 million people who 
will not be covered. This is unfair, Mr. Speaker. We should reject the 
Goodling amendment.
  The SPEAKER pro tempore (Mr. Walker). The gentleman from Missouri 
[Mr. Clay] has 1\1/2\ minutes remaining, and the gentleman from 
Pennsylvania [Mr. Goodling] has 2\3/4\ minutes remaining. The gentleman 
from Pennsylvania [Mr. Goodling] has the right to close the initial 
debate.
  Mr. GOODLING. Mr. Speaker, I yield 1 minute to the gentleman from 
Illinois [Mr. Fawell].
  Mr. FAWELL. Mr. Speaker, I think it is too bad that we have what I 
would call extremism here as we try to talk about something I hope more 
rationally. When we talk about the fact that the Goodling amendment, 
for instance, is going to cause some 10 million people, for instance, 
to lose coverage under minimum wage, I can only shake my head.
  I would refer my colleagues to the fact that over 200 Members of this 
Congress, including being led by Mike Espy, a member of the other side 
of the aisle, a short time ago pointed out that before the passage of 
the minimum wage law back in 1989, there was $362,500 annually, that 
is, businesses grossing less than $362,500 were granted exemptions. 
That was extended and increased to $500,000 at that time, but there was 
a mistake made. Mike Espy pointed out the mistake that was made.
  Mr. CLAY. Mr. Speaker, I yield the balance of my time to the 
gentleman from New York [Mr. Engel].
  The SPEAKER pro tempore. The gentleman from New York, Mr. Engel, is 
recognized for 1\1/2\ minutes.
  Mr. ENGEL. Mr. Speaker, I want to say there is no clearer issue in my 
opinion that defines the difference between Democrats and Republicans 
that raising the minimum wage.
  It has been clear. We on the Democratic side have tried for months 
and months to try to get a clean minimum wage raise, a lousy 90 cents 
an hour from $4.25 to $5.15. What have we gotten from the majority, the 
Republicans from the other side of the aisle? We have gotten stalling, 
delaying, all kinds of tactics.
  Now we finally get a bill and we have all kinds of things to hurt 
workers rather than to help workers, to exempt people from the minimum 
wage, all kinds of tricks and all kinds of nonsense.
  We asked for a clean minimum wage bill, a clean bill that would 
clearly say that the minimum wage ought to be raised from $4.25 to 
$5.15 an hour. Eighty percent of the American people agree that the 
minimum wage ought to be raised, including 70 percent of Republicans. 
But the Republican leadership has been against it. And they have not 
allowed us to have a clean up or down vote on the floor.

                              {time}  2100

  What could be easier or more simple than a clean up or down vote on 
whether the minimum wage should be raised 90 cents an hour? People have 
said here time and time again that the buying power of the minimum wage 
is at a 40-year low. All we are saying is that people who are working, 
people who are working people, they are not on welfare, they are not 
looking for a handout; they are working people, they deserve to be paid 
at a higher level.
  We should reject the amendments, and we should have a clean vote on 
the minimum wage.
  Mr. GOODLING. Mr. Speaker, I yield myself the balance of my time.
  The SPEAKER pro tempore (Mr. Walker). The gentleman from Pennsylvania 
[Mr. Goodling] is recognized for 1\1/4\ minutes.
  Mr. GOODLING. Mr. Speaker, tonight, of course, we were talking about 
an Employees Commuting Flexibility Act which really helps working 
people. I can remember as a superintendent I said to the school board, 
``Give me transportation, give me a car to go back and forth to work. 
That way Uncle Sam can't take any increase I get away from me because I 
will have transportation,'' and that takes care of a big expense for 
many people.
  So that is what we are talking about tonight.
  I was amazed. It sounded like we had a bidding war going on over 
there. We had 5 million, 10 million, we are up to 30 million. I guess 
tomorrow it will even get higher.

[[Page H5485]]

   Mr. Speaker, I would hope that tomorrow we give a little 
consideration to the fact that the Congressional Budget Office has said 
that a 90-cent increase could produce unemployment losses from 100,000 
to 500,000 jobs. Now, we better think about that. These are the most 
vulnerable people we have in our society, and so I would hope that when 
we get back tomorrow on track that we will consider those 100,000 to 
500,000 so that we consider all Americans.
  As I said, they are the most vulnerable, and when we move in to try 
to create more jobs, it is going to be small businesses that are going 
to promote those jobs and create those jobs. So we better think 
seriously about that.
  The SPEAKER pro tempore. All time in this part of the debate has 
expired. Pursuant to the order of the House of today, further 
consideration of the bill will be postponed until tomorrow.

                          ____________________