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Jumpstart Our Business Strength (Jobs) Act

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Location: Washington, DC


JUMPSTART OUR BUSINESS STRENGTH (JOBS) ACT

Mr. KENNEDY. Madam President, I welcome the opportunity to join with my friend and colleague, the Senator from Iowa, in urging the Senate to accept this amendment he has proposed on overtime. I want to take a moment or two this afternoon to review, very quickly, where we are in terms of what our workers in this country are facing at this time in terms of our economy.

First of all, Madam President, I ask unanimous consent that the excellent editorial entitled "Timeout on Overtime Rule" in the Los Angeles Times be printed in the RECORD at the conclusion of my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered.

(See exhibit 1.)

Mr. KENNEDY. I will mention, very quickly, some of the points that were made in this editorial, "Timeout on Overtime Rule." This is what they mention:

Unfortunately, the new Labor Department overtime rule intended to clear things up just makes them murkier. . . . Despite [Secretary] Chao's assurances that she's worked hard to "get it right," the National Assn. of Police Organizations determined that "while many police are protected, others are not."

A former Department of Labor investigator last week told a House committee the ambiguous wording threatens [many] protection[s] now afforded to many workers-including nursery school teachers, nurses, chefs, team leaders, outside sales people and financial service employees-who earn from $23,660 to $100,000 a year.

It continues: "American workers have fueled recent productivity gains but failed to share in the newly created wealth because, as Alan Greenspan recently told the Senate, 'virtually all of the gains in productivity ended up in rising profit' " suggesting that the investments are not going back to those in terms of the increasing productivity but are all going back into profits.

And then it points out:

A panic about their overtime is the last thing workers need. . . .

As we know-and the figures point out very clearly-American workers work longer and harder than any other workers in the world. They average working longer than any other nation in the world-2½ weeks longer in a year than workers in the United Kingdom; 7 weeks longer in a year than workers in France; 4, 5 weeks longer every year than most of the industrialized countries in Western Europe. American workers today are working longer, and they are working harder. But what has happened is we have seen that 8.4 million Americans are out of work. We have seen the loss of jobs over the period of the recent years. We have seen the economic record of 2.4 million more unemployed workers today than we had in 2001. So American workers are working longer, they are working harder, and we have seen a significant loss of jobs.

I heard my friend and colleague from Utah refer to those who have gone back into the labor market. But as the Senator knows very well, many of those people are working part-time because they still can't find full-time work. This is a reflection of the fact that we have seen American workers working longer and working harder. And there is also a loss of some 2 million jobs.

What has happened to the wages of those workers? Look at the difference in the wages of those workers who were working in the year 2000 versus 2002. In the year 2000, they were averaging $43,848, and now they are averaging $42,408. We have seen a significant reduction-some $1,400-in wages that have been lost during the period of the last 2 years for jobs that are already in existence. And this administration is trying to cut back even more.

What is the administration's problem with working families? They oppose an increase in the minimum wage. They oppose extending unemployment compensation. And now they are trying to cut back on the income of working families.

Well, we hear: Look, we have created, under this administration, some new jobs. The interesting point is, the new jobs that have been created are averaging 21 percent less in pay than the old jobs that were there. So we have seen a significant reduction in the pay that workers receive if they have been able to hold their job. If you have lost your job, and then you get a new job, it is paying 21 percent less than what it was paying in the year 2001, and still the administration wants to reduce those figures even more for hard-working Americans who are trying to make it.

Now, what has happened? What are these families doing? These families who were making $44,000, and maybe now they are coming back into the market and making 21 percent less? Let's look at the kind of burden those families are under. Let's look, for example, at what has happened in terms of if those families are sending one of their children to college. We find out if they are sending their children to a 4-year college, the average increase in college tuition has increased 26 percent since 2001. Virtually nothing has been done by the Bush administration to try to get a handle on that.

There are things that can be done. We have had good ideas and good suggestions of trying to work with colleges, work with States, work with the Federal Government in trying to get a handle on the increased costs. We have families working harder, working longer, and making less, and finding out-when they are trying to put their children through college-college tuition, in the last 2½ years, has gone up some 26 percent. They see they are making less money now. If they have their old job or even if they have a new job, they are finding out, if their children are going to college, what is happening at a 4-year public school.

Let's look at what has happened in terms of their health care premiums. The costs are virtually out of control. This chart shows their premium increase versus the CPI. The CPI might represent what some of these workers are getting in their increased wages in terms of their employers, but look what has happened to the costs that are out of control. Over the period of the last 4½ years, the increase in health care costs have gone up 43 percent. How are the average working families in this country able to make it? Their pay is going down. There are new jobs paying less. Tuitions are going up. Health care is going up. We have a proposal on the floor of the Senate. That is not bad enough, if they work even harder and longer, we are going to cut back on that.

You can take the same with regard to the issue of prescription drugs. I see my friend from Oregon in the Chamber, Senator Ron Wyden, who has done so much in the area of prescription drugs and trying to get a handle on the costs of prescription drugs. He is a real leader in the Senate on this issue.

If you look at what families are paying in increased costs for prescription drugs, those costs are virtually out of control.

That is why those of us on this side of the aisle have asked: What in the world does this administration have against working families? Why now, the first time in more than 60 years, are you going to undermine or assault or attack overtime pay for workers? Why? It just isn't right and it just isn't fair.

Look at what has happened in the recovery we have had, briefly, in the last several months. Let's look at how that recovery has affected workers and how it has affected the profits for companies. Here we have a chart that shows the difference between the recovery in the early 1990s and today's recovery. This chart reflects what the difference is between workers wages and corporate profit.

In the early 1990s, when you had a recovery in the 1990s, you found out that the workers participated in expansion of wages 87 percent and the corporate profits went up 13 percent. Here it is today. With today's recovery, it is 60 percent goes to corporate profits and 40 percent to wages. And company after company, industry after industry is trying to cut that back in terms of wages.

Just look at some of the industries, what they requested in terms of this administration. I will illustrate with the restaurant association, but the list goes on.

The National Restaurant Association requests that DOL include chefs under creative professional categories as well as the learned professional category.

Then from the Federal Register, April 23: The Department concludes that to the extent a chef has a primary duty of work, requiring invention, imagination, originality, or talent-imagine telling a chef that he didn't have those, how long would he work in a restaurant; of course, it means all the chefs-such chef may be considered an exempt creative professional.

There is the request of the National Restaurant Association. There is the result.

Take the insurance companies. Here is their request, the National Association of Mutual Insurance Companies' letter to the Department of Labor: The National Association of Mutual Insurance Companies supports the section of the proposed regulations that provides that claims adjusters, including those working for insurance companies, satisfy the fair labor administrative exemption. Therefore, will not qualify for overtime.

From the Federal Register just 10 days ago: Insurance claim adjusters generally meet the duty requirements for the administrative exemption.

There is the request of the special interest; there is the result. I could take the rest of the afternoon. You could go industry by industry. We are talking about modernization, to make these regulations more understandable. This is what it is all about. It is the bottom line. The bottom line of those industries, taking it out of the pockets of the men and women who are working hard, working longer, as the first chart showed, more than any other industrial nation in the world, having a hard time making ends meet, paying for the education of the kids, affording the health care, paying for the prescription drugs. That is what this is all about.

Here are the various groups that are affected: nurses, nursery school teachers. Imagine this, nursery school teachers. I looked through the regulations. Imagine denying nursery school teachers. When we understand the importance, anyone who has had the opportunity to read "From Neurons to Neighborhoods," Jack Shonkoff's brilliant book that summarized three Academy of Sciences studies that showed that the intervention in the early years make the greatest difference in terms of children.

We are concerned about education and we are going to make sure those nursery school teachers, even if they are qualified, even if they deserve it, no way, are they going to be excluded. The list goes on. The list goes on.

Finally, I want to mention this chart that shows what happens when you either have protections for overtime or you don't have protections. Protections meaning if you are required, you pay time and a half versus you don't pay time and a half, what is going to be the impact on workers.

Workers ought to listen to this. Workers ought to take a look at this chart. If you have overtime protection and you work more than 40 hours a week, only 19 percent of the workers are going to be required to work overtime. But if you don't, if the employer doesn't have to pay the overtime, it goes up to 44 percent, more than double. Workers beware. That is how you are going to end up. You are going to be required to work much more than the 40-hour workweek and you are not going to get compensated for it.

And it isn't only the 40-hour workweek. If you have a 50-hour week, you are three times as likely to work longer than if you have the coverage under overtime.

This can be summarized very easily as a continuation of this administration's war on working families. Working families are not asking for much. They want a decent job with decent pay and decent opportunities for the future. They have a sense of pride, and they want to do a good job in the job they are doing. And they want to work. We are stacking it against them. We are saying we will not increase the minimum wage, even though it is 7 years since the last time we saw an increase and even though its purchasing power is at an all-time low and that it affects 7 million Americans, fellow citizens who work hard, play by the rules, primarily janitors, teachers assistants, people who work in nursing homes. Those are the recipients of the minimum wage. And it is mostly women. This overtime issue is a women's issue. This overtime issue is a women's issue because we have seen the expansion and the growth of hours that women are putting in in the workplace.

This administration has been opposed to an increase in the minimum wage, opposed to unemployment compensation, and now opposed to overtime. It is basically wrong. It is unfair.

This Harkin amendment addresses the unfairness. Americans understand fairness and unfairness. This underlying proposal of the administration is unfair.

I ask unanimous consent to print in the RECORD an excellent summary by Eileen Appelbaum from Rutgers University that talks about reinvestment in the United States as a share of corporate profits has hit a postwar low.

There being no objection, the material was ordered to be printed in the Record, as follows:

It is not a lack of profits that has kept U.S. corporations from investing. As Figure 3 shows, the after-tax capital share is at its highest level in the post-War period. Indeed, the Wall Street Journal reports that 60 percent of U.S. companies and 70 percent of foreign-owned companies in the U.S. didn't pay ANY federal taxes for the years 1996 to 2000 (Wall Street Journal, April 6, 2004, p.1). Nevertheless profit reinvested in the U.S. as a share of corporate profits has hit a post-War low.

In 2003, corporate taxes fell to just 7.4 percent of federal tax receipts-its second lowest share since 1934. Further tax cuts for corporations are not likely to spur investment or create jobs. The problem is the overhang from overinvestment in IT and telecommunications during the latter half of the 1990s and the on-going restructuring of companies. This, combined with a lack of attention to strengthening manufacturing where nearly 40 percent of investment takes place, suggests that low rates of business investment are likely to be a drag on the economy and private sector job creation for several more years.

Investment has begun to rise over the last two quarters, but the growth in corporate profitability has been even more impressive. If companies continue to grab productivity gains and a larger slice of the economic pie for themselves, and profits continue to squeeze wages, consumption growth will not be able to continue to sustain the economy. Growth in investment is unlikely to be able to overcome the drag on the economy from giving workers a smaller slice of the economic pie.

Mr. KENNEDY. Make no mistake about it. What this is about is increasing the profits. Do we think those profits are going to be reinvested in the worker? There is no indication that they will be. This is about the bottom line.

The question is, Whose side are you on? Are you on the side of working families trying to make it in America or are you on the side of the companies trying to increase the bottom line? That is what the issue is.

I applaud the Senator from Iowa and hope the Senate will support that effort.

EXHIBIT 1

[From the Los Angeles Times Editorial, May 3, 2004]

TIMEOUT ON OVERTIME RULE

Overtime pay makes ends meet for many U.S. workers. But the federal regulations that determine who merits overtime are so complex that employers and employees end up in court way too often, Unfortunately, the new Labor Department overtime rule intended to clear things up just makes them murkier. A timeout is called for, if just to figure out who the winners and losers really are.

An earlier version of the new rule drew 80,000 comments from befuddled workers and employers alike. The final rule published in April-though a clear improvement-has provoked outright argument about what some of its provisions really mean.

Labor Secretary Elaine L. Chao maintains that, when the rule takes effect in four months, it will guarantee overtime protection to workers earning less than $23,660 a year and strengthen overtime rights for 6.7 million other American workers, including 1.3 million low-wage, white-collar workers who previously didn't qualify. Workers, though, aren't taking Chao's word for it.

Despite Chao's assurances that she's worked hard to "get it right," the National Assn. of Police Organizations determined that "while many police are protected, others are not."

A former Department of Labor investigator last week told a House committee that ambiguous wording threatens protection now afforded too many workers-including nursery school teachers, nurses, chefs, team leaders, outside sales people and financial service employees-who earn from $23,660 to $100,000 a year.

American workers have fueled recent productivity gains but failed to share in the newly created wealth because, as Alan Greenspan recently told the Senate, "virtually all of the gains in productivity ended up in rising profit."

The economy isn't spinning off jobs quickly enough to get the unemployed back to work, and young workers are frustrated by a minimum wage that hasn't budged since 1997. A panic about their overtime is the last thing workers need, even though the regulations surely do need some straightening out.

Rather than take Chao's word, Congress should order the Labor Department to delay implementation of the complex overtime regulations until everyone knows what really will happen to workers' paychecks. Get a think tank on the job.

Replacing one flawed set of regulations with another won't diminish lawsuits and may allow unscrupulous employers to take advantage of more workers. As Chao has noted, key portions of the rule hadn't been changed in more than 50 years. A few more weeks isn't going to matter.

The PRESIDING OFFICER. The Senator from Alabama.

Mr. SESSIONS. Madam President, I wish to take a few minutes to talk about the overtime rules. I believe they are a marvelous step in the right direction. After 40 to 50 years of inaction and lack of review, I believe we are in a position to make some changes today. Secretary of Labor Elaine Chao is one of the finest members of this administration. She is a determined public servant. She advertised those changes. She solicited information from various groups and individuals and got 70,000 responses. They evaluated those responses and made the proposed rule changes that are before us. I think it is clearly a step in the right direction and will add to the number of people who are covered. The final rule updating part 541 of the Fair Labor Standards Act regulation is important.

When these rules were established, we used words and terms that don't really exist today. They used terms like "gang leader." That has quite a different tone today than it did when that rule was set up. There was also "linotype operator" and overtime was guaranteed only for persons who made less than $8,060 a year. So this rule change improves the regulations in quite a significant way.

I had the personal experience of working as a lawyer and representing two individuals who had problems with overtime. I represented the first individual against a company. I had not studied the law that much, but I had been a Federal prosecutor and I knew the people. One was a friend from my high school days and he operated heavy equipment. He said: Jeff, I think I have been entitled to overtime. I worked extra hours. When the weather was good, we worked extra hours.

They saw him as a contractor and he saw himself as an employee. I began to look at the law and I thought he was right. We filed a lawsuit and the company knuckled under and paid him. I took a fee out of it, and I am sure the company paid their lawyers a fee for representing them. A pretty significant chunk of the man's overtime had to be paid on litigation fees.

I represented an administrative assistant. The group she worked for had meetings at night. She would be required to go take notes and keep records, but they didn't pay her overtime. We filed an action on that and, eventually, they agreed to pay her. Interestingly, that lady worked for a union. So the union wasn't paying one of its own employees overtime as they were required.

What we need is more clarity in this situation. We need a legal system that everybody can understand. When you know who is covered, then people can demand their overtime and they will get it. It is my experience that you will not have quite as many situations where people blatantly violate the law if they know what the law is. If the law is confusing, they will play in the gray areas and take advantage of people. If it is clear, people will tend to follow it-most employers will. I think that is what we are looking at here.

The Department of Labor did not prematurely propose this rule. It was after a great deal of work and effort and listening and evaluation and changing and updating and altering the proposal. I think they have done a terrific job. It meets the realistic needs of the modern workplace so much better than this 50-year-old rule that has not been changed since the beginning.

I have been disappointed that our friends in the labor movement leadership have sought to utilize this change as an opportunity to attempt to scare working Americans and cause them to believe they are somehow being taken advantage of in this process. That is not so. I was disappointed to learn that the AFL-CIO prepared ads attacking the rule, before it was even published. That is not the right way to do things. We all ought to be a part of the process. If you have a specific example of something that is wrong, bring it up with the Secretary of Labor, as many did, and as labor groups did, and they will evaluate it and make the changes that work.

This is an attempt-and a successful attempt-to make the rules simpler, fairer, and clearer. We have to do better than the current law. Under this final rule-and this is so significant-workers making $23,660 or less per year are absolutely guaranteed overtime. In the past, a worker making $14,000 annually could be classified as a manager and be denied overtime.

Under the new rules, that worker and 6.7 million others will be guaranteed overtime protection regardless of whether you call them a manager, a boss, or whatever you want to call them. If they make less than that, they are classified as eligible and have to be paid overtime if they work more than the 40 hours per week. This will cover the person at the print shop, the fast food place, and the laundry. Maybe they have been classified as a manager because they do the business and manage some. Under this, if they are paid less than $23,660, automatically they will be covered. That is 6.7 million workers who are going to be guaranteed overtime protection.

This is not something that is trying to harm the worker. I know my friend, Senator Kennedy, is quite an advocate. But I have to tell you, I don't appreciate him saying that this rule change is a war on American workers. What kind of rhetoric is that? What kind of partisanship is that? What kind of collegiality and respect for the process is that? This is a good series of rules, not a war on the American worker.

He talks about college tuition, health care, prescription drugs, and all these issues he wants to talk about but not specifically what is wrong about this regulation. There is not anything wrong with it. It is a step forward. It is good for American workers and we need to do that.

I know he talked about a lot of things. One thing he did not suggest was that if we got a handle on the number of illegal workers in this country, there would be more jobs for American workers? We will get more people at that $18, $20, $25 range. That is where we want people to work at. He didn't talk about that.

There are lots of things we can do to improve the life of the working American man and women. One of them is to update the overtime rules. I believe this has been done openly and publicly by a Secretary of Labor who is a lady of integrity and great ability, who listened to the complaints and ideas and suggestions, and she has made progress.

For example, I believe Senator Harkin mentioned law enforcement officers. The largest law enforcement group in America, a workers group, a labor group, the Fraternal Order of Police, has clearly supported this rule change. They participated in the process and they made their suggestions. They were happy when it was over. This is what the president of the Fraternal Order of Police, Chuck Canterbury, said when the Department of Labor issued the final regulation. He said it was "an unprecedented victory for police officers and their families." These are America's first responders, the police, firemen, and EMTs.

He goes on to say that "the Fraternal Order of Police is extremely grateful for the work of the Secretary of Labor, Elaine Chao, and Wage and Hour Administrator, Tammie McCutchen, to take into consideration and incorporate the views of the FOP in developing their final regulations."

He goes on in great praise of them. It has also been repeated on the floor earlier today that somehow veterans are unhappy with this bill and it is going to hurt veterans.

But I have a letter from the Veterans of Foreign Wars. They are one of the largest veterans groups. They say in a letter to Secretary Chao on April 22:

The Veterans of Foreign Wars of the United States appreciates your soliciting our comments and recommendations on the revision of the Fair Labor Standards Act to strengthen and clarify

That is how he referred to it, "strengthen and clarify"-

the overtime protection provisions; particularly provision addressing veterans and the training they received while serving in the Armed Forces. Much confusion and erroneous misinformation was disseminated.

Boy, that is true. There has been so much misinformation.

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

Mr. SESSIONS. Yes, for a question, without losing my right to the floor.

Mr. KENNEDY. I think the Senator is correct in the fact that the earlier provisions certainly apply to the training veterans received. I think my own reading of this is that they may very well apply to this group of veterans who have specialized training. Why didn't the administration add a line saying that anyone who received training in the Armed Forces would not be covered? That would have resolved the issue. If the Senator wanted to add that as an amendment, I would encourage the Senator from Iowa to accept that.

Mr. SESSIONS. I thank the Senator from Massachusetts for his comments. As a lawyer-and I know Senator Kennedy is a lawyer-these things get pretty complicated. Sometimes making blanket rules like that can create unfairness in the system.

Let me go on and continue with what the Veterans of Foreign Wars said on April 22 about this legislation:

Much confusion and erroneous information was disseminated with respect to how the proposed regulations could adversely affect veterans. You and the staff of the Veterans Employment and Training Service and the Wage and Hour Division's willingness to engage the VFW and other Veterans Service Organizations in constructive dialog resulted in the removal of language pertaining to "training in the Armed Forces," thus ensuring veterans would not be denied overtime as a result of such training. Again, the VFW appreciates your recognition of those who serve our Nation in war and peace.

The Disabled American Veterans, a good, strong group that does a lot of good work here:

Dear Secretary Chao: On behalf of the 1.2 million members of the Disabled American Veterans, I would like to express our gratitude for keeping us and other veterans' service organizations informed throughout the revision of rules governing overtime eligibility for workers under the Fair Labor Standards Act. We also commend your efforts to protect veterans by ensuring that a worker's status as a veteran cannot be used as a basis for exemption from overtime pay.

And from the American Legion-I suppose they know what is good for veterans. I certainly know they advocate for them on a daily basis. National Commander John Brieden III wrote to Secretary Chao, April 26, last week:

I am writing in support of the recently released regulatory changes to the Fair Labor Standards Act. The American Legion has a long history of advocating in support of veterans employment and training entitlements, and we are pleased with the Department of Labor's part 541 final regulations that seek to clarify overtime pay eligibility rules.

They are happy with them.

He goes on to write, recent assertions that the proposed regulatory changes target veterans who rely on overtime pay caused undue concern for those proud veterans who have successfully transitioned into the civilian workforce.

Who has been telling them all this misinformation? They are all saying that. How are they being told this? I am afraid the truth is, we are in a political season, and the Secretary of Labor stepped up to the plate to make some changes that needed to be made. They have not been changed in 50 years, and those who have a political agenda who want to try to embarrass President Bush, frankly, because Secretary Chao is a Cabinet Secretary in his administration are going to blame him for adversely harming workers, and it is not right. Listen to the people who were there:

Recent assertions that the proposed regulatory changes target veterans who rely on overtime pay caused undue concern for those proud veterans who have successfully transitioned into the civilian workforce. The removal of language referencing training in the Armed Forces will ensure that no worker will be unjustly penalized for their veteran status as a result of these regulatory changes. At a time in our history when American service members are answering the Nation's call-

Indeed they certainly are-

to arms in more than 130 countries worldwide, this country must ensure that all military and veterans entitlements are preserved rather than stripped away.

The American Legion supports the Department of Labor's efforts to clarify eligibility for overtime pay, and we applaud you, Madame Secretary, for ensuring that the employment rights of America's veterans are protected.

It is time for us to deal with this situation. These rules are better. A lot of people who have been called managers, who are making $18,000, $19,000, $20,000, $21,000, $22,000 a year and are being denied overtime because their employers crafted a job description that made them a manager, will be guaranteed overtime. If you make below $23,660, you are guaranteed overtime. If you make over $100,000, you are not. But for the others this will be guaranteed.

This is a step forward for clarity. It is going to reduce litigation. It is going to reduce class action lawsuits. It is going to reduce the excessive cost that comes from those lawsuits, and it will make lives better for American workers. That is our only goal. If I thought it harmed our American workers, I would not support it.

I believe the Secretary of Labor is on the right track. I ask our colleagues to oppose the Harkin amendment.

I yield the floor.

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