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Public Statements

Raising the Minimum Wage

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Location: Washington, DC


RAISING THE MINIMUM WAGE -- (Senate - June 19, 2006)

Mr. KENNEDY. Mr. President, I support the John Warner National Defense Authorization Act of fiscal year 2007, and I commend the impressive way in which the distinguished Senator from Virginia has led the Senate Armed Services Committee over these last 6 years. He has provided a consistently steady hand on the tiller in these troubled times, and the Senate's action in naming the bill is eminently well deserved.

In a time of conflict, our first and foremost responsibility is to provide for our troops in the field, and this bill provides for our soldiers, our sailors, marines, and airmen defending our great country in all parts of the world. We have improved on the administration's request for our service members. Our forces overseas are being stressed, and they bear the heavy burden of combat. Yet the administration would cut their end strength and reduce the value of the retirement health benefits they may well need to cope with the effect of the war.

The committee wisely chose not to follow this path. Instead, we maintained the end strength and benefits in addition to a 2.2-percent pay raise and larger targeted increases for midgrade, enlisted, and warrant officers. The bill also improves on the administration's request for future readiness. It authorizes substantial investments in key ships, aircraft, and Army transformation programs. It also ensures long-term value for the taxpayer by preserving competition in our vital aircraft engine and shipbuilding industries.

In addition, it calls for continued acquisition reforms to reduce fraud and waste in defense spending. Even more important, the bill invests in the protection of our personnel. It authorizes over a billion dollars in force protection equipment, including up-armored HMMWVs and body armor.

And it also provides $2.1 billion for the joint improvised explosive device defeat fund to support a Manhattan project effort to deal with IEDs, the No. 1 threat to our forces in the field and to innocent Iraqis.

So this is a very worthy piece of legislation. It bears the name of one of our most honorable Members, the chairman of our committee, and I welcome the opportunity to support that.

I had intended this afternoon to offer an increase in the minimum wage as an amendment to the Defense authorization bill. I think it is a fair question to ask, does this really make sense on a Defense authorization bill? I respond to that that so many of those brave men and women are fighting in Afghanistan or Iraq or fighting for the values this Nation represents, and one of the values this Nation represents is fairness and decency to hard-working American workers. Fairness and decency for hard-working American workers means they are going to be paid a fair, just wage. That is why I think it is consistent with this legislation. I know we are going to have important debates and discussions on other parts of the Defense authorization bill, but we welcome the opportunity to raise this issue. It is not a new issue, it is a familiar issue. It doesn't take a great deal of time, although a number of our colleagues wish to be heard on it because it is an issue we have debated and discussed going back to the 1930s. The Members of this body are extremely familiar with it as a public policy issue in question and can express an informed judgment about it in virtually short order.

For generations, Americans have believed that if they worked hard and played by the rules, they could achieve the American dream. They believed they could be better off than their parents or could join the middle class. They could earn more each year, provide safety and security for their families, and save for their retirement. But today, more and more Americans are losing faith in that dream as prices for everyday necessities, such as gasoline and housing and health care, skyrocket. Too many hard-working people are living on the edge--just one serious illness, one pink slip away from bankruptcy.

For minimum wage workers, the American dream is even further from reality. Minimum wage workers are men and women of dignity. They care for their children and for young children in daycare centers. They care for senior citizens in nursing homes. They check out groceries in the supermarket. They clean our office buildings. But the minimum wage they receive no longer covers their bills. A minimum wage worker who works 40 hours a week, 52 weeks a year, earns just $10,700. That is almost $6,000 below the poverty line for a family of three.

At these wages, no matter how hard they work, minimum wage workers are forced to make impossible choices between paying the rent and buying groceries, paying the heating bills or buying clothes. They cannot afford health care. They cannot earn enough to pay for adequate housing for their families anywhere in the country. Minimum wage workers' daily fear is poverty, hunger, and homelessness. Our Republican colleagues continue to turn a blind eye to the struggles of working families in this country, particularly the hard-working people who work for the very lowest wages.

It has been almost 10 years since Congress raised the minimum wage. Time and again, many have called on the Senate to increase the minimum wage. Yet, time and again, Republican colleagues refuse to give working people the raise they deserve, even though we grant annual pay increases to Senators. What could be more hypocritical?

Fortunately, the American people understand what the Republican leadership does not, and that is nobody who works hard for a living should have to live in poverty. That is why the American people overwhelming support an increase in the minimum wage. Year after year, as the GOP Congress keeps refusing to help minimum wage workers, the American people are rising up. They are marching in the streets and praying in churches and synagogues. They are also taking their battles to the ballot box and telling us overwhelmingly that a minimum wage increase is long overdue.

This amendment that I am offering with a number of my colleagues will raise the minimum wage to $7.25 an hour in 3 steps over the next 2 years--70 cents now, 60 cents a year from now, and 60 more cents 2 years from now. This increase will directly raise the pay of more than 6.5 million workers, indirectly benefitting more than 8 million more.

Contrary to public perception, these workers are not teenagers looking for their first job for pocket change. Eighty percent of those who benefit are adult workers, more than a third the sole breadwinners of their families. Raising the minimum wage is something I believe is enormously important, and the time to do it is now.

I want to review for the Senate for a few minutes a brief history of where we are in terms of the minimum wage. It started in 1938. We see the Presidents listed here. They represent Republican Presidents, as well as Democratic Presidents, who have supported an increase in the minimum wage, going back to 1938. Franklin Roosevelt, three different steps; Harry Truman; Dwight Eisenhower, a Republican; John Kennedy saw an increase; Lyndon Johnson; Richard Nixon; George Bush; and William Clinton.

The history of the minimum wage up to the last few years has basically been a bipartisan effort. Yet we have not been able to get a bipartisan effort to increase the minimum wage over the period of the last 9 years. What has happened to those who are on the lowest rung of the economic ladder? As I mentioned, these are men and women of dignity.

At the start of this debate, we have to understand who the minimum wage workers are. They are men and women of dignity. These are tough, difficult jobs, but they try to do them well, and they take great pride in their jobs. They work as assistants to teachers, in nursing homes looking after the elderly, cleaning out the great buildings of American commerce, and they are maids in various buildings all across this Nation. They are men and women of dignity.

I thought we had sort of an agreement in this body, with Republicans and Democrats alike, that if you have a job, you ought to have a job that gets you out of poverty, not one that keeps you in poverty. Currently, the minimum wage keeps you in poverty; it doesn't get you out of it. I thought we could all agree that we want to get people who work hard and play by the rules out of poverty and have their work be rewarding. I thought that would be something at least Republicans and Democrats could agree on. But we have not been able to get that agreement, Mr. President.

What we have seen over the period since 2000 to 2004 is

the number of Americans now living in poverty--those lowest income people have increased by 5.4 million of our fellow American citizens. Well over a million of those are children who are living in poverty in the United States. The principal reason for that is because we have not seen an increase in the minimum wage, which is something we can do that can make a major difference in the reduction of poverty for these people who are working hard.

Now, this chart shows what the poverty line is. Look where the minimum wage is in the 1960s, right at the poverty line. In the late sixties, it was even above the poverty line. It would have been close to $19,000 a year in terms of real purchasing power. Then in the 1970s and through the 1970s up until 1980, we kept the minimum wage at the Federal poverty level. Then we have seen the decline in the purchasing power of the minimum wage now to be less than $5,888. It was up to $19,000 at one time, but is now down to $5,888. You see, Mr. President, if you look at this chart, the 1990 figure--just above it--that was when we raised the minimum wage. And again, in 1997, we saw an increase in the minimum wage. That is when we see those red indicators go up. That shows how far we have seen a decline in the minimum wage. The real minimum wage declined 20 percent in the 9 years of Republican opposition. It is not just the fact that the figures have been frozen, it is the fact that its purchasing power has declined significantly.

Look at this, Mr. President. This shows the dramatic reduction down 20 percent in the purchasing power of what we have passed previously. We are not only not increasing the value of the minimum wage in terms of purchasing power, which has declined; now we see in our proposal, effectively over a 2-year period, we raise it to $7.25. We know that we will hear from some that we cannot raise that to $7.25 because of the dramatic impact, adverse impact, it would have on the American economy. It is interesting that this fall in the No. 2 economy in Europe, which is Great Britain, it will be $9.80 an hour. In another leading economy in Western Europe, which happens to be Ireland, it is $9.60 an hour. They have robust economic growth in their economy.

Listen to their chancellor, Gordon Brown, talk about the difference the increase in the minimum wage has made. The number of people they brought out of poverty is 2 1/2 million people, and a million and a half people they brought out of poverty in Great Britain. We have the possibility of making a modest difference with this. This is a modest increase to $7.25.

I put this chart up because it is a clear indication about what is happening out in the workforce with American workers. They are working longer and harder. More than 39 million Americans, which is 28 percent of the workforce, work more than 40 hours a week. Nearly one in five workers works more than 48 hours a week.

More than 7.6 million Americans are working two or more jobs, and 334,000 of them hold two full-time jobs. So American workers' hours have increased more than in any other industrialized nation.

American workers are working longer and harder and getting less pay, Mr. President. We have seen an explosion in terms of productivity, but that is not being passed down to the workers at the lower rung, although it was done at other times by Republicans and Democrats. So what do we say? Are we saying the minimum wage workers are slackers, or that these workers are not working the full time? Are we saying they are not showing up for work? Absolutely not. We see from these statistics that American workers--and particularly the workers at the lower income--are working longer and harder than any workforce in any other industrialized nation in the world.

These are the figures from the OECD in 2004. You see that Americans have increased more than any other industrialized country. Many countries have actually gone down. Canada has gone up, from 16.8 percent since 1970 to 2002, and America is up 20 percent. This is what we have.

So what are we talking about? We are talking about an issue that primarily affects women because nearly 60 percent of workers affected by a minimum wage increase are women. So this is primarily a women's issue. Better than half of all of those women have children. So this is also a children's issue. This is a children's issue and a women's issue.

We hear a great deal about family values in this Chamber. This is a family value--how that child is going to grow up, whether that worker will be treated with respect and dignity, whether that mother or father is going to be able to spend time with that child. That is all reflected in whether we are going to get the increase in the minimum wage. This is also a civil rights issue because so many of those who earn the minimum wage are men and women of color. So it is a women's issue, a children's issue, and civil rights issue.

Mr. President, this $4,400 means that would be the cumulative value of that over the period of a year--2 years of childcare--at a time that this body is cutting back on childcare, and the waiting lists in our States are becoming extensive.

We know now this would help a family with childcare, with a full tuition for a community college degree, a year and a half of heat and electricity, more than a year of groceries, and more than 8 months of rent. This is not insignificant. It may be to Members of this body, but it is not insignificant to those people who are out there working hard.

What I believe is the most difficult point for Americans to understand is that from the time we raised the minimum wage last in 1997 to 2006, Members of Congress have increased their salary by $31,600, but we have refused to increase the minimum wage by 5 cents. Maybe someone can explain that. We have increased our salaries by $31,600, and we haven't increased the minimum wage 5 cents. That is not right, that is not fair, that is wrong, and we have an opportunity to change it.

At other times when we have talked about the minimum wage and the impact it has had on the total wages that have been paid in this country, many have said: If you increase the minimum wage, it is going to add to the problems of inflation. We see that the increase in the total amount of minimum wage we include in this is less than one-quarter of 1 percent of total wages that are paid. So it is incidental to that.

If we look back over the increases of the minimum wage in the 1990s, it had virtually no impact in terms of employment. Employment actually increased, and unemployment was reduced during that period of time. If we look at the various polls that have been taken even with small business, they say they don't believe they are adversely impacted by an increase in the minimum wage.

I submit that we are prepared to move ahead and increase the minimum wage as I open these remarks. I want to retain a few minutes for my friend from New Mexico. We sent our fighting men and women to Afghanistan and Iraq to fight for the values of fairness, decency, and justice, and we are talking about economic justice in this instance. If we are talking about trying to maintain our commitment to the kind of values for which they are fighting--economic justice, economic fairness is certainly one of them--then this issue about increasing the minimum wage is about as basic and fundamental in terms of economic justice as any issue we will have before the Senate.

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Mr. KENNEDY. Mr. President, there have been a number of cities, including Boston, across this country that have adopted a living wage. Of course, as the Senator knows, there have been a number of States even in the most recent times--North Carolina, Arkansas, the most recent--that have increased the minimum wage. I am wondering whether the Senator from New Mexico found out in Santa Fe, with an increase in the living wage, what we found out in Baltimore, for example, and that was, first of all, there is much lower turnover by workers in the community, and therefore there is much less training that is necessary for the municipality when they get new workers. There is a much higher degree of attendance, fewer people who are dropping out of the labor market, productivity has increased, and in all we have seen in so many living-wage communities that the concerns which have been expressed by the opposition have melted away because what has happened is the workforce that has remained has become more loyal, more productive, higher morale, and less willing to move or change jobs, better and continued training for their job, and the output for those workers has been a significant improvement. I wonder if the Senator has some general impressions with regard to his own observations and results.

Mr. BINGAMAN. Mr. President, I do think my strong impression is there have been many of the positive benefits the Senator cited that we have realized in Santa Fe and other communities in my State where there has been an increase in the minimum wage.

One other I would mention is that the number of families in need of temporary assistance has declined significantly since we moved to a higher minimum wage in Santa Fe, and that has been another benefit to the community.

Mr. KENNEDY. Will the Senator yield on that point?

Mr. BINGAMAN. Yes, I will be glad to yield.

Mr. KENNEDY. What we have seen is if the employers are not paying the minimum wage, then the workers are eligible for a variety of different Federal programs that are paid for by the general taxpayers; while if they pay the minimum wage or a living wage--and the living wage is more in correspondence to the poverty wage--then these workers are no longer eligible for the range of social programs that are available and there is less of a burden on working Americans. In other words, we find that many of the companies that are paying low wages are actually being subsidized by the taxpayers with either food assistance or additional housing or additional benefits for which they otherwise would not be eligible. This has been estimated to be in the billions of dollars.

The Senator makes a very good point that this is just an example about how many of these employers are being subsidized by the taxpayers by keeping low wages so their workers are eligible for other governmental programs, while if they are paid a decent wage, they wouldn't be eligible, and that would relieve the burden on the American taxpayers.

Mr. BINGAMAN. Mr. President, I agree entirely with what the Senator from Massachusetts has said. In fact, the governmental assistance programs that are required and that are in place do not have to do the job of filling in the gap between this poverty line and the minimum wage as we have allowed it to exist. So there is a serious issue here.

I wish to mention one other aspect of this issue.

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Mr. KENNEDY. Mr. President, I will just speak briefly and then yield to the Senator from Kentucky.

Just a point I want to underline, and that is the impact of a low minimum wage on children--on children. America's children are more likely to live in poverty than Americans in any other group. Nearly one in five children live in poverty. The poverty rate for children in the United States is substantially higher, often two or three times higher, than that of most of the other major western industrial nations. Sweden's child poverty rate is a fifth of America's. Poland's child poverty rate is half of America's. African-American and Latino children are more likely to live in poverty than White children.

One-third of African-American children live below the poverty line, as do nearly one-third of Latino children. We must give these children a boost in life by ensuring that their hard-working parents receive a living wage. Raising the minimum wage will help raise these families out of poverty, making a difference in the lives of their children. Increasing the minimum wage will help nearly 7.5 million children whose parents would receive a raise, and over 3 million kids have parents who would get an immediate raise.

Reducing child poverty is one of the best investments that Americans can make in our Nation's future. Fewer children in poverty will mean more children entering school ready to learn, more successful schools and fewer dropouts, better child health, and less strain on hospitals and public health systems, less strain on our juvenile justice system, and less child hunger and malnutrition and other important advances. It is long past time to raise the minimum wage. No child in this country should have to live in poverty.

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