[Congressional Record Volume 142, Number 101 (Wednesday, July 10, 1996)]
[Senate]
[Pages S7513-S7514]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE MINIMUM WAGE BILL

  Mr. CHAFEE. Mr. President, yesterday, I voted for legislation to 
increase the minimum wage from $4.25 to $5.15 per hour over the next 2 
years. Though this is a necessary increase, regrettably, Senators did 
not have a chance to vote for an ideal package.
  First, it is essential that employers be given adequate time to 
prepare to implement the proposed increase. For this reason, I voted 
for the Bond amendment, though I felt delaying the increase to January 
1, 1997, was too long. In my view, a reasonable effective date for the 
increase would have been September 1, 1996.
  As passed by the Senate, H.R. 3448 would be effective retroactively 
to July 1, 1996, leaving employers with no adjustment period. This is 
unfortunate, in my view.
  Second, I also believe a training wage is crucial for those entering 
the work force, particularly given our efforts to reform the welfare 
system. While many of my colleagues contend that increasing the minimum 
wage will encourage welfare recipients to obtain gainful employment, I 
am afraid the increase

[[Page S7514]]

will actually reduce the availability of new positions.
  Congress has spent the better part of 2 years developing and refining 
welfare reform legislation. All of the major bills include tough work 
participation programs. And most would require the States to have 50 
percent of their welfare recipients off of the rolls in the next 6 
years. Even if another 15 to 20 percent are granted hardship 
exceptions, the States will still be hard pressed to find enough jobs 
to meet the strict work requirements imposed by this legislation.
  In my State of Rhode Island, approximately 20,000 families are now on 
public assistance. If 20 percent of these families are exempt from the 
work requirement, that leaves 16,000 families who must find their way 
off of welfare in the next 6 years. Even if Rhode Island must find jobs 
for only half of these families, we are talking about 8,000 entry-level 
jobs. Given the stagnant economy within my State, that could prove a 
very difficult requirement to meet.
  Despite the fact that these new workers will undergo intensive job 
training and must also learn important life skills, such as being 
punctual for work, most former welfare recipients will qualify for no 
more than entry-level positions. While there may be a few exceptions, 
most will have to prove themselves before they will be given greater 
opportunities in the workplace.
  To retain some incentive for employers to hire and train welfare 
recipients, I believe a strong and effective training wage at the 
current minimum of $4.25 per hour should be included in H.R. 3448.
  Despite my concern that the Bond amendment contained a 6-month 
training wage, which in my view is too long, I voted for it. In 
contrast, the Kennedy alternative would have provided only a 30-day 
training wage, limited to those under 20 years of age. This provision 
would not have given employers the needed incentive to take a chance on 
hiring a welfare recipient.
  As passed by the Senate, the training wage included in H.R. 3448 has 
a duration of 3 months, but unfortunately is limited to those under 20 
years old. I would have preferred no age limitation on the provision to 
ensure its full utility in moving people from welfare to work.
  Third, in my view, small businesses should have some form of 
exemption from the minimum wage increases proposed in H.R. 3448. Very 
few employers who own small businesses qualify for the current 
exemption, which is flawed and unworkable.
  For this reason, I voted for the Bond amendment. This amendment would 
have enabled employers with gross incomes of less than $500,000 to 
continue paying the current minimum wage of $4.25 per hour, while 
larger businesses would have been required to comply with the increase.
  Regrettably, as approved by the Senate, the final version of H.R. 
3448 contained no change in current law with respect to the treatment 
of small businesses. And hurting America's small businesses, Mr. 
President, places big hurdles on the road to economic recovery.
  In summary, I am hopeful that some of these problems can be reviewed 
and corrected before H.R. 3448 becomes law.

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