[Congressional Record Volume 153, Number 9 (Wednesday, January 17, 2007)]
[Senate]
[Pages S644-S645]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         MINIMUM WAGE INCREASE

  Mr. COLEMAN. Madam President, I wish to talk about a bipartisan 
effort to increase the minimum wage. Last week, the House 
overwhelmingly passed legislation to increase the current minimum wage 
from $5.15 to $7.25 an hour. We will have a chance to deal with that in 
the Senate. We are going to get a better bill out of the Senate. We are 
going to have some small business protection which is important. But we 
do need to increase the minimum wage.
  I have long supported increasing the minimum wage. I strongly believe 
that Congress should ensure that the benefits of our strong economy go 
to everybody. My State of Minnesota is 1 of 29 that have sought to ease 
the burden for minimum wage workers by increasing the minimum wage 
above the Federal minimum wage. But it is well past time that Congress 
acted.
  It has taken more than 9 years to finally reach the point where we 
will be increasing the minimum wage, and it is about time. As a result 
of congressional inaction, the Federal minimum wage is actually at a 
50-year low, when we factor in inflation. That is simply not fair. It 
is not fair for our minimum wage workers who must deal with the ever-
rising cost of day-to-day living.
  There are some who argue that the vast majority of those receiving 
the minimum wage don't come from poor families. They claim that those 
receiving the minimum wage are middle income families, young, and work 
part time. I don't think the facts support that proposition. If 
Congress increases the minimum wage to $7.25, we are talking about 
helping about 50 percent of the workers who come from poor and low-
income families. We are talking about helping out those Minnesotans who 
work in the nearly 230,000 low-wage jobs who would benefit from an 
increase. We are talking about 40 percent of hourly workers who are 
making $5.15 or less who are uninsured.
  Congress needs to find bipartisan solutions to reduce the ranks of 
the uninsured. We need to act to improve health care accessibility and 
affordability for all Americans, not the least of which are low-wage 
workers. It is important to make the point that these same uninsured 
Americans are also the ones who will benefit most from a hike in the 
minimum wage.
  While I support increasing the minimum wage, I, also, support 
targeted small business protection. I want to see the hit of an 
increase in the minimum wage lessened. It is no good to increase the 
minimum wage if you are going to take away somebody's job. You have to 
look at the impact on small business.
  I am a former mayor, a member of the Small Business Committee. I 
understand the importance of small business to our economy. I believe 
that America's future is tied to the growth of small business. Small 
businesses become big businesses, but they have to start small. They 
need the kind of protection we are talking about, bipartisan relief.
  I have introduced legislation--and apparently a bill will come out of 
committee--that will provide some protection. I want to make sure a 
couple other things are in there, such as increasing expensing for 
small business. My small business owners tell me this is important. 
Under this sort of expensing, businesses can take an immediate 
depreciation deduction of up to $112,000 on taxes for qualified 
business purchases. This is important to do the right kind of 
protection and ensure that businesses can continue to hire workers and 
continue to grow and expand.

  I applaud the Finance Committee today for passing small business 
relief. I think it includes an extension of increased expensing and a 
15-year straight-line cost recovery period for qualified leasehold and 
restaurant improvements. I am not going to get into the nitty-gritty, 
but we are making progress. That is good.
  I wish to comment on one other aspect of the minimum wage debate that 
is not included in the bill out of the Finance Committee. It is called 
the tip credit. Although this is somewhat of a technical issue, at the 
end of the day this is about jobs, plain and simple.
  So what is tip credit? With tip credit, employers can count a certain 
part of their employees' tips toward meeting their employees' minimum 
wage. Tip credit has long been on the books. Labor laws recognize it. I 
know the State of New York has tip credit. I think there are 7 of the 
States that do not have a tip credit; 43 States have it. Again, labor 
laws recognize it, tax laws recognize it. It is an issue that impacts 
about 10,000 Minnesota businesses and their workers--mostly in the 
hospitality industry, such as restaurant workers. Those are important 
businesses. They are gathering places in the community. They are the 
cornerstone of many of the communities.

[[Page S645]]

They form an important part of the State's tax base. The restaurants 
and those folks employed there are active in the community. They 
sponsor the local youth teams and support schools and neighborhood 
projects. Restaurants are where Little Leaguers celebrate victories, 
families celebrate special occasions, and tourists spend good money, as 
in my State of Minnesota. This is a way of life which is increasingly 
under threat. Minnesota is one of seven States that do not have tip 
credit. My hospitality industry is at a competitive disadvantage with 
respect to those States which surround us which allow for tip credit. 
Those in the hospitality industry in our border areas are in 
competition with other States.
  Minnesota has a minimum wage of $6.15 an hour. That is a good thing, 
but it is not the case in our neighboring States. I think if we look at 
the other chart, for instance, Wisconsin has an even higher minimum 
wage. Ours is $6.15 an hour, with a tip credit of $4.17. In Wisconsin, 
an employer pays a minimum hourly cash wage of $2.33 and can apply 
$4.17 of their employees' tips toward meeting the minimum wage of 
$6.50. The employers in Wisconsin, Iowa, South Dakota, and North Dakota 
in the hospitality industry can pay employees less. There is a lower 
cost of doing business, which puts my employers at a competitive 
disadvantage. We are at risk of losing jobs in these areas.
  As I have always said, the best welfare program is a job program and 
a housing program. Consider dining out in the border town of Moorhead, 
MN. Just across the river in Fargo, ND, there are more than 50 national 
chains, and there is only 1 in Moorhead.
  Operating on an unfair playing field with North Dakota and Wisconsin, 
hospitality establishments have to make tough decisions, such as 
raising prices, cutting the workforce, reducing employee hours or, 
worse, shutting down in the State. Peggy Rasmussen, the owner of 
Countryside Cafe in Hamel, is seriously considering closing down her 
business because of this tip credit issue. When businesses such as 
Peggy's shut down, their workers are left behind and so, too, are our 
communities.
  This is a fundamental question of fairness. Forty-three States have 
tip credit. All of Minnesota's neighbors have tip credit. Minnesota 
does not.
  I wish to make it clear that any change in the tip credit law is not 
going to result in a lowering of this wage for Minnesotans. Anything we 
do needs to be prospective. I want to defend our restaurant employees. 
This is what they are making. Over time, we can equalize some of the 
disadvantage. We can do it in a way that doesn't support a tip credit 
that would lessen a worker's minimum wage.
  As we increase the minimum wage, which I have consistently said is 
the right thing to do, let's also ensure that States such as Minnesota 
can operate on a more level playing field with the rest of the 43 
States that have the tip credit. Without the tip credit, Minnesota's 
hospitality businesses and workers will continue to be hurt.
  Throughout my time in the Senate, I have sought to improve the living 
standards of America's hard-working families. Increasing the minimum 
wage is one way to do so. I look forward to voting with my colleagues 
from both sides of the aisle to increase the minimum wage.
  It is my hope that the minimum wage proposal will also allow for tip 
credit, which is critical to the future of Minnesota's businesses and 
workers, which is, in the end, about fairness and, most importantly, 
about keeping jobs in the States that need them.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.

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