[Congressional Record Volume 144, Number 126 (Monday, September 21, 1998)]
[Senate]
[Pages S10647-S10648]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              MINIMUM WAGE

  Mr. KENNEDY. Mr. President, on another matter, on tomorrow we will 
have an opportunity to address the issue of an increase in the minimum 
wage for working Americans, at 2:15 p.m. Starting at 10:30 in the 
morning, the amendment will be before the U.S. Senate, and we will have 
that opportunity, with the time equally divided before the luncheon 
break, to make the case for the increase in the minimum wage for 
working Americans, those who are on the lower rung of the economic 
ladder.
  This afternoon, in the time which is available, I would like to 
anticipate and respond to a number of our colleagues who will raise 
questions about whether it is appropriate to increase the minimum wage 
at this time.
  Throughout the history of the minimum wage, our opponents have 
claimed that raising the minimum wage will add to the rate of 
inflation. Those who oppose fair increases in the wages for working 
families also claim that unemployment will increase among the workers 
in this country and, therefore, be counterproductive to the various 
people we are trying to help.
  We have raised it on five different occasions since the end of World 
War II. So it is fair enough for us to look back on the history of the 
increases in the minimum wage to find out if there is validity to those 
particular arguments. And, quite clearly, those arguments have to fail 
on their face. And I will have an opportunity briefly this afternoon 
and in a more detailed way to respond to these arguments on tomorrow.
  But a basic, fundamental point, Mr. President, that is at the heart 
of this whole issue is whether we in this country really honor work and 
whether we think that Americans who work 40 hours a week, 52 weeks of 
the year ought to live in poverty, that they ought to live in poverty 
and that their children should live in poverty.

  As Americans, we have experienced the most extraordinary economic 
growth over the period of the last 6 years, with economic growth, price 
stability, low interest rates, low rates of inflation, declining 
unemployment. We are also experiencing the longest period of economic 
growth and price stability in the history of this Nation.
  I think we were reminded a week or so ago when we found out that the 
stock market went down some 300 points. People were saying we lost $1 
trillion in terms of value, and then it bounced back the next day. We 
see these extraordinary fluctuations. We see the extraordinary creation 
of wealth in just about every population, except for the low-income, 
working families in this Nation. They have not been a part of the 
growth of economic prosperity.
  If we look at what happened in this country in the immediate post-war 
period, from 1948 into the late 1950s through the 1960s, and actually 
up to 1972. If we divided the economic incomes into what they call 
quintiles and divide by five, and look at the relative growth in terms 
of income over a 30-year period, in the post-war period where we had 
times of recession, inflation, a variety of economic shocks, we come to 
one very basic and fundamental conclusion. All of those quintiles went 
up, and went up together. There was merely a 5-point or 10-point 
percent difference between those at one level and those at another 
level. All Americans went up together. The rising tide raised all the 
boats. We did not have this period of economic growth and price 
stability.
  What has happened in the more recent times? In more recent times we 
have seen the enormous accumulation of wealth among the most fortunate 
individuals in this country and the wealthiest corporations and an 
actual decline in the purchasing power of the minimum wage workers. 
They have been the big losers. They haven't just been holding steady, 
they have lost in terms of purchasing power.
  We have an opportunity tomorrow to say whether this is fair, right 
here in the United States of America, among our fellow citizens who are 
working hard and trying to provide for their families and have hopes 
and dreams like every Member of this body.
  It is interesting that just this last year Members in the U.S. Senate 
accumulated, with our rate of inflation on our own salaries, the 
equivalent of more than $1.50 per hour in 1 year. Do we understand 
that? Every Member in this body this last year got an increase of more 
than $1.50 an hour. And they all effectively took it.
  We are talking about the men and women in this country who work as 
teachers' aides, in nursing homes, and who clean these facilities that 
we have here in buildings all across America. They are also child care 
workers or assistants to children. We are asking to provide these 
workers an increase of 50 cents in January and 50 cents the following 
year.
  We, in the Senate, have taken $1.50 for ourselves, and I didn't hear 
many voices in opposition to that. But we will hear a lot of opposition 
tomorrow about providing 50 cents for these hard-working Americans next 
year, and 50 cents the following year. We will hear opposition and we 
will have a vote here in the U.S. Senate. I will be frank and say it is 
still an uphill battle. We are continuing to make that case, and we are 
hopeful we will be successful.
  How can we possibly justify voting ourselves $1.50 more an hour, but 
not for the child care workers, not for the teacher assistants, not for 
those working in nursing homes and looking after our parents? Why? 
Because they will say they are worried about inflation and are worried 
about the impact of the increase of the minimum wage on our total 
economy--an $8 trillion total economy. Ten million Americans will get 
the equivalent of another $1, spread over a 2-year period. The proposed 
increases in the minimum wage would amount to a tiny fraction of our 
total economy.
  We are going to hear from some who will say we cannot afford it 
because it will be an inflator in terms of our economy. It wasn't an 
inflator when we had an increase for ourselves, but it will be an 
inflator if we are going to provide the increase for these working 
families. Many are working, single mothers who are trying to provide 
for their children. Sixty percent are women who have two or three jobs 
to try to provide for their families.
  We hear a lot on the floor of the U.S. Senate about family values. 
What about that mother who doesn't have the time to spend with that 
child on their homework or doesn't have the time to take that child for 
a walk in the park on a Sunday because they

[[Page S10648]]

have to go to another job? When that child asks to go to a birthday 
party, and the mother says, ``You can't because we can't afford a 
present,'' what about those family values? What about those family 
values?
  Raising the minimum wage is a fundamental issue of fairness. Are we 
going to honor work? Are we going to say to our fellow citizens that 
we, as a nation, have enough sense of common purpose and direction that 
we believe that many of our neighbors who may not have the kind of 
training or the education, may have had a life that has been 
challenging and difficult, may be struggling to try to provide for 
their families, are not even going to be able to be lifted out of 
poverty?
  We have seen the greatest accumulation of wealth in the history of 
this Nation, and we have seen the greatest growth of disparity between 
the most affluent and those who are the neediest workers in our 
country, and we have seen this disparity grow to be greater than it has 
ever been in the history of this Nation. This is a very, very small 
step to try to do a little something about it. In past years, raising 
the minimum wage has been a bipartisan effort.
  This chart reflects basically the points I have been making in the 
past few moments. This chart shows about where the minimum wage was, in 
real, constant dollars, from 1955-1998 and beyond, to the year 2000. In 
1955, we got the increase in the minimum wage. It went to almost $6. 
For the period of the late 1950s, to the 1960s, the 1970s, beginning 
into the early 1980s, in all that period of time, for some 30 years, 
the purchasing power for the minimum wage was far above what it would 
be if we were able to pass the legislation tomorrow to increase the 
minimum wage by 50 cents next year and 50 cents the following year.
  All we are trying to do is get to the bottom, not to the top, of what 
it would be--$7.38 in purchasing power. We are trying to just get into 
the zone. We will still be at the lowest for a period of 30 years, at a 
time of economic prosperity. These increases that have taken place 
since 1955 have had Republican and Democratic support. It didn't used 
to be a partisan issue. But we are just trying to get there.
  We have to ask, Is that so unreasonable, Mr. President? Look what 
happens if we are not successful. If we are not successful in getting 
the increase in the minimum wage, the purchasing power of the minimum 
wage, drops back to $4.82 an hour. By 2000, it drops back to $4.82. We 
are just trying to get the minimum wage up to $6.15. Even by 2000, it 
will only be worth $5.76. It will still be well below what the 
purchasing power has been in here, Mr. President.
  This is an extremely modest bill. This gives you the history on this 
chart. These are working families and individuals, who will and can 
work, who play by the rules, go out to earn a modest living every 
single day. If these workers miss a paycheck, they miss paying the 
utilities. If they miss a paycheck, they can't afford to provide for 
the kind of attention to meet health care for a child. If they miss a 
paycheck, there is no opportunity to provide for children. Nor can they 
give them a night out at the movies. That is how close this figure is, 
Mr. President.
  Do you know what this $1 increase represents, Mr. President? That $1 
increase, most of all, means dignity to these workers. That is our No. 
1 reason. These workers can free themselves from the reliance on 
support programs. It gives them a sense of dignity. That is important. 
We spend a great deal of time around here adding and subtracting and 
looking at balances. Once in a while, we ought to look at what the real 
impact is in terms of human quality. It is dignity. It is the fact that 
men and women can look at their families and know that they have a job 
that offers them an opportunity to live with some dignity. That is what 
this is really about.
  But look at what this $1 represents. Some people might say, well, 
that is not an awful lot. It certainly is for these families. It 
represents about 6 months of groceries for a family. It represents 
about 7 months of rent, on average, for a family. It represents two-
thirds of the tuition for a community college so that one of their 
children can go on to a community college. That is the kind of hope and 
opportunity it means for these families. It is a big deal. It is 
important. We talk about a billion dollars here and a billion dollars 
being real money. But this 50 cents and 50 cents--another dollar, over 
the period of 2 years--is a lot of money for working families.
  So, Mr. President, the other issue I will mention very briefly here 
is whether this adds to the rate of inflation. Mr. President, I want to 
address these two issues very quickly; that is, what the impact of the 
increase in the minimum wage is on inflation.
  Raising the minimum wage does not fuel inflation. It says on the top 
of this chart, right here, going back to 1996, in January of 1996 we 
have three-tenths of 1 percent. This is the inflation rate increase per 
month during this period of time. It is three-tenths of 1 percent. It 
dropped here. Then it went up. But, generally speaking, for a period 
before 9 months, it was three-tenths of 1 percent. It increased it to 
$4.75.
  Look at what happens to the rate of inflation. It drops back and 
drops, and it settles on in here. Instead of three-tenths per month, it 
drops down to two-tenths per month. Then we increase it to $5.15, and 
down it goes again, and then up, and then down again. This spans from 
January of 1996 through June of 1998. That is a pretty clear indication 
that the two last increases, with the rate of inflation, when we didn't 
have as favorable an economy as we do today--that effectively there has 
been no impact on the rate of inflation.
  If we look at what the impact of the minimum wage has been on the 
unemployment rate, again, this chart here represents--these are Bureau 
of Labor statistics and they are authenticated. If you look back in 
October of 1996, what the rate of unemployment was, it was just above 5 
percent--about 5.2 percent. We saw the increase in the minimum wage and 
a little blip here, and then we see how it has declined, below 5 
percent. It was increased to $5.15, and the chart settles in now to 
about 5.5 percent. I think, if we look at the most recent figures, it 
is down to 4.3 percent.
  So the two major arguments have been that it adds to the unemployment 
rate and it adds to the inflation rate.
  The final point I will make, since this is an argument that is raised 
most recently, as well--maybe it doesn't add to inflation, but let's 
look at this. The minimum wage doesn't harm small business, it says on 
this chart. This is a Jerome Levy Economic Institute 1998 survey of 568 
small businesses. ``Did the recent increase in minimum wage affect 
hiring or unemployment decisions?'' Mr. President, 6.2 percent said 
yes, 79 percent said no. ``Would raising the minimum wage cause you to 
lay off or hire workers?'' Three percent said yes, 93 percent said no. 
They have a longer study which basically supports this.
  We have had the Restaurant Association that has talked about how this 
was going to be ``devastating.'' But they have increased their 
employment by 230,000 restaurant workers over this period, although 
they had predicted an absolute disaster in terms of the restaurant 
business. That is done by the Bureau of Labor Statistics. So it is 
important that we try to put this into some kind of perspective.
  The basic issue in question is: Are we going to be fair to working 
Americans? Do we believe that these Americans who are at the lower 
level of the economic ladder should be able to participate, to some 
degree, in terms of economic prosperity? Tomorrow, we will have an 
opportunity to answer that question. I hope that the Senate will vote 
in favor of providing it.
  I thank the Chair and I thank the Senator from Iowa.
  Mr. GRASSLEY addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.

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