[Congressional Record (Bound Edition), Volume 145 (1999), Part 19]
[Senate]
[Pages 26753-26754]
[From the U.S. Government Publishing Office, www.gpo.gov]



                              MINIMUM WAGE

  Mr. KENNEDY. Mr. President, I would like to take a few moments of my 
time under the bill to talk about a subject I am very hopeful we will 
be able to address in the very near future. It is a subject matter that 
has been outstanding during the course of this year and that we have 
still failed to act on, and that is to try to see an increase in the 
minimum wage for many of the workers in this country.
  We have seen in more recent times the Congress move ahead to increase 
its own salary some $4,600 a year. When we increase the minimum wage, 
it will mean approximately $2,000 to those who are working the hardest 
at the lower end of the economic ladder but who perform extraordinarily 
important jobs that are really, in many respects, at the heart of the 
engine of the American economy today.
  I think all of us are mindful that we have had the most extraordinary 
economic boom in the history of our country. But there are those 
Americans who have been left out and left behind. There is no group of 
Americans who have been more disadvantaged than those who are working 
at the minimum wage level. That is why I was very hopeful we would see 
fit to address this issue this year because we find that those minimum 
wage workers are falling further and further behind.
  I want to remind our colleagues about what has happened on the issue 
of job growth because the most familiar argument we have in opposition 
to the minimum wage is that it will somehow dampen the increase in jobs 
and, secondly, it will add to the rate of inflation.
  Let's look at what has happened in the most recent times. This chart 
goes from 1995 up through 1999 and it indicates when the Senate and the 
Congress actually increased the minimum wage. We increased the minimum 
wage to $4.75 in 1996, and still we saw job growth continue through 
1996 and 1997. We increased the minimum wage then in 1997 up to $5.15. 
This was a two-step increase of 50 cents and 40 cents, up to what is 
now $5.15.
  There were those who warned the Senate of the United States that if 
we saw this kind of increase, we would lose anywhere from 200,000 to 
400,000 or 500,000 jobs in the job market. But what we have seen is a 
continuation of the expansion of the job market, where we find it going 
up and up until September of 1999. Past increases in the minimum wage 
have not meant the loss of jobs.
  Secondly, if we look at this chart, this is the employment rate. 
Another way of looking at the issue of jobs is the employment in our 
country with the increase in the minimum wage. The unemployment rate is 
at historic lows after a minimum wage increase. On the two steps here, 
if we look, we find that we went from almost 5.5 percent unemployment, 
and then in September of 1997 we were just below 5 percent. Since that 
time, it has continued to decline. So we have seen an expansion of the 
growth rate and a decline in overall unemployment in this country.
  Well, you could say there must have been some impact in terms of the 
rate of inflation. But what we have seen, and as we know, is if you 
have an increase in productivity and the rise in productivity exceeds 
the increase in the payment, you don't get the rates of inflation. That 
is what we have seen.
  According to labor statistics, we have seen what is represented by 
this blue line on the chart--an increase in productivity for American 
workers over the period from 1957 to 1959, up to 1998. This is the 
annual productivity increase. We have seen a significant increase in 
the productivity.
  If we look at what has been the impact of the real minimum wage, the 
kind of decline here, now the spread between productivity and the 
purchasing power of the minimum wage is at one of its greatest since 
the enactment of the increase in the minimum wage. Productivity is up, 
and we should see an increase in terms of the wages for those workers.
  If we look at what has happened in terms of the real value of the 
minimum wage, we see that in 1968 it would be worth $7.49. If we had 
the minimum wage today in purchasing power of what it was in 1968, it 
would be $7.49. This is what has happened in terms of real dollars.
  We are now at this level of $5.15 an hour. Without this increase, it 
will drop down to $4.80, almost back to where it was at the time we saw 
the very modest increase 4 years ago. Even with the increase, it would 
put the real value at $5.73. With two 50-cent increases over the next 2 
yours, the purchasing power would still be only $5.73. We are always 
playing catchup with the millions of American workers who receive the 
minimum wage.
  We are delighted to debate these issues with those who continue to 
give the old, worn-out, tired arguments in opposition: that raising the 
minimum wage will mean loss of jobs and that it is going to add to 
inflation. We are glad to debate those issues. But we are being denied 
by the Republican leadership the ability to consider an increase in the 
minimum wage.
  This is a Business Week editorial, May 17, 1999. It is not a Democrat 
journal. It is not a voice for the Democratic Party. Of course, years 
ago when we had the increases in the minimum wage, we had 
bipartisanship. It has been only in recent times when it has become a 
partisan issue.
  As Business Week points out,

       Old myths die hard. Old economic theories die even harder . 
     . . higher minimum wages are supposed to lead to fewer jobs. 
     Not today. In a fast-growth, low-inflation economy, higher 
     minimum wages raise income, not unemployment.

  I ask unanimous consent that the full article with regard to the 
minimum wage be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   [From Business Week, May 17, 1999]

                      The Myth of the Minimum Wage

       Old myths die hard. Old economic theories die even harder. 
     Remember the one about inflation rising as unemployment 
     falls? How about productivity dropping as the business cycle 
     ages? Or the U.S. is a mature economy doomed to slow growth? 
     One old favorite is that higher taxes inevitably lead to 
     recession. These days, none of these theories appears to 
     work. A new economy driven by high technology and 
     globalization seems to be changing old economic 
     relationships. But one economic shibboleth still remains 
     popular: the bane of minimum wages.
       Congress is debating whether to raise the minimum wage from 
     $5.15 to $6.15. Opponents of the bill cite reams of economic 
     research showing that minimum-wage hikes curtail demand for 
     cheap labor. Like the trade-off between employment and 
     inflation once said to be inherent in the Phillips curve, 
     higher minimum wages are supposed to lead to fewer jobs. Not 
     today. In a fast-growth, low-inflation economy, higher 
     minimum wages raise income, not unemployment.
       For proof, look no further than the minimum-wage hike of 
     1996-97. The two-stage hike of 90 cents raised the wages of 
     nearly 10 million employees. Nearly three-quarters of these 
     were adults, and half the people worked full-time. In 1996, 
     the unemployment rate was 5.4%. Today, it is 4.2% (page 42).

[[Page 26754]]

       The economy is evolving at a tremendous clip--shedding its 
     old skin before our eyes. In this ever-changing environment, 
     the best policy aims at increasing flexibility and options. 
     Keep markets free, promote growth and entrepreneurship, and 
     open the doors to opportunity for all participants. A higher 
     minimum wage can be an engine for upward mobility. When 
     employees become more valuable, employers tend to boost 
     training and install equipment to make them more productive. 
     Higher wages at the bottom often lead to better education for 
     both workers and their children.
       In the New Economy, it often makes sense to leave old 
     economic nostrums behind and take prudent risks. Federal 
     Reserve Chairman Alan Greenspan, for example, has withstood 
     pressure to raise interest rates in the face of strong 
     economic growth. Traditional theory said that inflation 
     follows fast growth. It hasn't. Greenspan bravely took a 
     chance, and America has profited from higher growth. 
     Congress, for its part, has withstood pressure to allow 
     states to impose sales taxes on the Internet. Economic theory 
     says this is harmful because it creates an unfair competitive 
     advantage. But it is the right policy because it nurtures a 
     pervasive technology that is driving the economy.
       It is time to set aside old assumptions about the minimum 
     wage, as well. We don't know how low unemployment can go 
     before inflation is once again triggered. But Greenspan is 
     testing the limits. We don't know how high the minimum wage 
     can rise before it hurts demand for labor. But with the real 
     minimum wage no higher than it was under President Reagan, we 
     can afford to take prudent risks.

  Mr. KENNEDY. Mr. President, in reading that particular article, you 
will see that they make the point that the money that is actually used 
or actually received by minimum wage workers is spent and adds to the 
economy.
  Take a State such as Oregon, that has the highest minimum wage in the 
country. Since Oregon went to a higher minimum wage more people are 
working, because it brought people who work back into the labor market 
because they were able to provide meaningful income to themselves and 
to their families. It provided an additional boost to the economy.
  That concept has been supported by the Card and Krueger studies that 
have been referred to in other debates on the minimum wage.
  Raising the minimum wage is an issue of fundamental and basic 
fairness, fairness and justice for men and women who are working at the 
lower economic rungs of the economic ladder. These are people working 
as assistants to school teachers in many of the schools across the 
country. These are people who are working as assistants in nursing 
homes that are looking after our parents and grandparents. These are 
men and women working in the great buildings in our major cities 
cleaning up after long days. These buildings effectively would not be 
functioning unless people were willing to provide that kind of work.
  This issue, as I have said many times, is a women's issue because the 
majority of individuals will benefit from increasing the minimum wage 
are women. This is an issue of civil rights because one-third of 
minimum wage workers are men and women of color. This is a children's 
issue because more than 80 percent of families earing the minimum age 
are headed by women. Providing for the children in these families is 
directly related to the incomes that people have, and many have not 
just one job but the two jobs held down by many minimum wage workers 
who are heads of households.
  We hear a great deal about family values. How are parents going to be 
able to spend their time with their children when they are out there 
working on two different jobs trying to put food on the table, a roof 
over their heads, and trying to clothe their children?
  It is amazing to me when we have this greatest economic boom in the 
history of this country, this body is going to be begrudging to men and 
women who work hard, 40 hours a week, 52 weeks of the year, and who 
value work. How many speeches did we hear on the other side of the 
aisle that we honor work, and we want them to go out and work? People 
are out there working, and you refuse to give them the kind of income 
they need so that they can work in dignity and not live in poverty.
  I know we have a lot of important pieces of legislation. This isn't a 
very complicated issue. Every Member in this body knows these issues. 
Everybody knows this issue. We are not talking about a complicated 
policy question. It is just a question of whether we are prepared to 
stand up and speak for those individuals who have fallen further behind 
economically than any other group--any other group in our society. They 
are the minimum wage workers. They haven't even been able to maintain 
the purchasing power of their wages, they have fallen further and 
further behind and continue to do so.
  With all respect to all the other items we have in the Senate in 
terms of public policy questions, certainly the issue of fairness to 
our fellow citizens is something the American people understand.
  The obstinacy of the Republican leadership in refusing to permit a 
limited period of time for us to vote on this issue, I think, is a real 
tragedy for these families. It certainly is. But they have refused and 
refused and refused with these tired, old arguments. We cannot get this 
issue on the agenda. They say we are the majority and we will set the 
agenda.
  Let us have an opportunity to vote on those issues.
  We saw our colleagues on the other side of the aisle say: Well, all 
right; if we are going to find an increase in the minimum wage for 2 
years, we are going to require $35 billion in unpaid tax breaks that 
are going to swell to $100 billion over ten years.
  If you want to look after the working poor, Senators, they say, you 
are going to have to provide $100 billion in tax breaks--not related to 
small businesses, not related to minimum wage individuals, but to the 
highest paid 10 percent of taxpayers in this country who will get over 
90% of the benefit from those tax breaks.
  Still we can't even have a chance to debate, they refuse us the time 
even to debate that. They ought to be ashamed of themselves.
  The last time we provided an increase in the minimum wage was the 
first time we added all the tax goodies. Now the Republican leadership 
understands they have a train coming along the tracks, and they are 
piling up and piling up.
  They may consider doing $1 over 3 years.
  We have already delayed a year--2 years now. They refused to let us 
bring up the issue up last year, and they are refusing to let us bring 
it up this year. They want to spread it out three more years. That 
won't even keep up in terms of inflation for those working families. 
And to be able to do even that, you have to tag on $100 billion over a 
10-year period of tax goodies, unpaid for.
  If these individuals end up contributing and paying taxes, they will 
be paying some of their taxes to try to offset the increase that the 
Republican leadership wants in these tax breaks.
  We may see another hour that goes by without facing the minimum wage 
issue. We may see another day that goes by without facing the minimum 
wage issue. But I will tell you, it is inevitable that we will one way 
or the other bring these measures to the attention of the Senate and 
try to get accountability.
  How many times do we have to hear about accountability on the other 
side of the aisle? We want accountability. We want accountability for 
this. We want accountability for that. We want accountability for 
everything except being willing to vote up or down on the increase in 
the minimum wage. Yet they were quite prepared to vote themselves--all 
of the Senate, and the House of Representatives--a $4,600 raise. But 
they won't even permit a vote on the Senate floor on an increase in the 
minimum wage.
  Mr. President, maybe that goes over well someplace. But it doesn't 
seem to me that it will go over well with the American people. We 
intend to continue to press this issue.
  Mr. President, I withhold the remainder of my time.




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