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National Defense Authorization Act for Fiscal Year 2007 - Continued

Location: Washington, DC

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2007--Continued -- (Senate - June 20, 2006)


Mr. KENNEDY. Mr. President, the issue we are talking about, my good friend and the chairman of the Committee on Human Resources is talking about, and that I have talked about earlier, is whether we were going to have an opportunity in the Senate to take a few minutes to consider an increase in the minimum wage for the lowest paid workers in America. I had offered that as an amendment on the Defense authorization bill.

One might ask: Why are we doing this on the Defense authorization bill? The answer to that is we would not have another opportunity to do it on any other bill until the recessing of the Senate.

In my opening remarks when I offered that amendment, I indicated to the chairman of the Committee on Armed Services that we would be glad to work out a time for consideration that would not interfere with the general debate and discussion of the issues on the Defense authorization bill, but we have been unable to get that at this particular time. Therefore, we are talking about this issue at this time.

The Senator from Wyoming asked why is this relevant to the Defense authorization. I think the answer is rather compelling. That is, when we think of why the service men and women are fighting in Iraq and Afghanistan, and around the world, they are fighting for American values, American principles. Part of American values and principles is economic fairness, not the exploitation of poor workers in the United States of America. That is why it is relevant.

We are talking about the ideals and the values of the United States of America. We are talking about family values. We are talking about what people at the lowest rung of the economic ladder are going to get paid.

I bet some of these individuals who will be affected by the minimum wage are over in Iraq now fighting. They are wondering, why in the world are we taking up time when we have not increased the minimum wage in the last 9 years and we have taken the time to see six pay increases for the Senate? They are saying: Why aren't you providing that increase for the minimum wage for these workers? That is what we are talking about.

Can anyone imagine that? We are going to get another pay COLA increase next week. We have increased our own salaries $30,000 over the period of the last 9 years. And how much have we given to an increase in the minimum wage? Zero.

We have, I daresay, men and women who are serving in Iraq whose parents are probably earning the minimum wage. We are talking about getting an increase to $7.25 an hour.

This issue never used to be a partisan issue. I regret it has turned out to be a partisan issue. We have been unable to get our Republican friends to give us an opportunity to vote on an increase in the minimum wage. We are caught in this situation because we cannot get an up-or-down vote on the increase in the minimum wage.

Since the time of the initiation of the minimum wage, going back to Franklin Roosevelt, Harry Truman, Dwight Eisenhower, Republican, all had an increase in the minimum wage. Richard Nixon, an increase in the minimum wage. George Bush, an increase in the minimum wage. But we do not have anything after Bill Clinton and the increase in the minimum wage. Nine years is the longest period in history for no increase of the minimum wage.

If the Senator would let us have an up-or-down vote, we will take a very short time period. We are interested in taking a short time. We only received the Republican alternative about an hour and a half ago. We still don't know what the scoring is on it. The initial statement we have heard is that it is pretty much the same as it was a year ago, and that basically cuts overtime pay. It also undermines the States' opportunities to deal with problems on the tip credit. It also eliminates worker protections under the Fair Labor Standards Act. That is a fine option that is going to be out. That is what we have gotten in the last hour or so.

If I had the attention of my friend from Wyoming, the managers of the bill are here, I would ask unanimous consent that upon completion of the Defense bill, the Senate turn to the minimum wage bill, the text of which is my amendment, that the Enzi amendment be in order, that there be 4 hours of debate equally divided, and then we would go to a vote.

Mr. WARNER. Mr. President, I would have to object.

Mr. KENNEDY. I have heard the objection. We have had complaints about my offering the minimum wage amendment on this legislation. Then what do we do? We say: OK, let's let this go through. But just give us an opportunity to consider an increase in the minimum wage on the floor of the Senate with a very short time limitation.

And we can't get agreement on that. There you go. That is what this is all about.

I must say the idea that this isn't appropriate, if we could have gotten an option to go ahead and have the individual bill for an increase in the minimum wage, have an opportunity to vote on both the Senator's amendment and our amendment, let's have that and let's go back to the good old days where a majority would carry. That is fine with me. That would be fine with me. I will just take a half an hour on our side. Surely, the Senate can find time to give a half an hour to the issue of increasing the minimum wage for workers. One half hour, let's see where the Senate goes, whoever gets more than 50 votes. That used to be the way around here. But not now. We hear complaining about bringing up the minimum wage on this bill, and they still are going to have to get 60 votes on it because there will be a point of order raised against this on the budget.

We have heard a great deal before, at the time when my good friend was talking about his health care bill about wanting to have a debate on his health care bill. Remember that? It wasn't all that long ago. Let's have a good up-or-down debate. Let's have a vote. What is it, denying the opportunity for people to have this debate?

Well, we would be more than glad to have this legislation. You can have on your side a half an hour. We will take a half an hour. Let the chips fall where they may. If the leader wants to come out and make that, we have offered similar to that. There has been objection to it, but it is a reflection of our good faith.

From an early reading of the amendment of the Senator from Wyoming, they would raise the minimum wage by $1.10. Would the Senator tell me what the cost of the Enzi amendment is? What is the cost? Do we have a budget point of order?

Could I address the Senator from Wyoming? If he could tell me what the budget cost of his amendment would be? While he is doing so, I will mention a couple of other points.

His amendment would raise the minimum wage by $1.10 instead of by $2.10, which our bill does. It cuts overtime, and it also reduces benefits so only 1.8 million workers would be covered. That is 4.8 million fewer than my amendment. Theirs is $1.10 an hour instead of $2.10, and there are 4.8 million fewer than my amendment. Then it also cuts overtime pay. It ends Federal labor standards coverage for over 10 million workers. By raising the gross income of the companies that will be covered, they will eliminate 10 million workers. They will be eliminated from any kind of minimum wage or fair labor standards protections.

Then it basically overturns State actions that are dealing with what they call the wage tip credit which States vary about how they do it. But the Enzi amendment puts a cap on that. The States now, for example, can have a higher minimum wage than we have. We haven't preempted the States because it has always been a flooring. Some States believe that those who depend on tips ought to be given a somewhat additional break. We are talking about people who make $5.15 an hour, maybe make $6 or $7 in tips, and you are trying to nickel-and-dime them on that with the Enzi amendment, preempt the States.

I hope my colleagues have a chance to read through this overnight because we are preempting the States that have reached a different conclusion with regard to tip credit. The Enzi amendment says that is going to be out.

That is quite a mouthful. People understand those issues pretty well. They are very important. I don't know whether we have an answer. I will be glad to hear it later on. Could the Senator give me what the budget cost for his amendment would be?

Mr. ENZI. I would like to be able to do that. I don't have the numbers that I need to have. I appreciate the question, but I can't give you an answer yet.

Mr. KENNEDY. Well, I imagine we will get them later in the afternoon or get them on tomorrow. Could the Senator indicate when we might anticipate those? The reason this is important is because we are talking about 50 pages of tax issues in the Enzi amendment. Therefore, there is a cost to it. It does seem to me that prior to the time that we have a vote, we ought to know what those particular costs are. We have on the one hand the issues that are directly related to the minimum wage, and then we have the costs in terms of an addition to the deficit.

I don't know whether the Senator could tell us that we are going to get it later this evening. If you can give us the assurance, if you think we will have it this evening, that is fine; otherwise, whatever help the Senator could provide, I would be grateful.

Mr. ENZI. In answer to the question, Mr. President, I can't tell how long it will take for the Joint Tax Committee to have the new numbers. But I can tell you, I didn't know that the Senator was going to offer his amendment until yesterday. The estimated revenue effects that we have are from the one that we did and voted on last year which shows over a 10-year period that all costs are covered with a slight surplus.

Mr. KENNEDY. I am not sure that I completely understood the Senator's response in terms of the cost. What is the cost of the first, second, third, fourth, or fifth year? We will try and get that, if we could.

I point out to my colleagues, the amendment I offer is 2 1/2 pages. The Enzi amendment is 71 1/2 pages, 50 of which are tax provisions. It does seem to me if we were debating, look, ours is $2.10, yours is $1.10, let's go at it. Let the Senate make a judgment. But it isn't that. We have 50 pages in here of tax provisions that are going to evidently be called incentives on the one hand but to others they are going to increase the deficit on the other hand. I am not exactly sure what those are. Then we are not only being questioned about that, but we also know that we have in that proposal a cut of overtime pay and the ending of Federal Labor Standards Act coverage for 10 million workers and basically a preemption of States that want to treat the tip credit in the way that they want, which is quite a proposal. I would hope that we would have a chance, which I expect we will, to at least examine it over the evening.

This chart says the $1.10 increase leaves 4.8 million workers behind, the difference between the Enzi proposal and the way ours is drafted.

I wanted to address a couple of the issues the Senator has pointed out with regard to small business. This chart shows results of a Gallup Poll of May 2006: 86 percent of small business owners say the minimum wage does not affect their business. The question was: How does the minimum wage affect your business? Eighty-six percent said no effect; 8 percent, negative effect; positive effect, 5 percent; no opinion, the rest.

So it is kind of interesting, we have sort of gone beyond this point in terms of where the small business community is. They have a pretty good understanding of what happens. What we have found out with the increase, for example, on the living wage, you take the most dramatic example is the neighboring city of Baltimore. When they increased it to a living wage, what happened? First of all, they had less turnover. It was less costly on the city in terms of training new workers.

Secondly, they increased their productivity. They got less individuals who stayed home on sick leave because people began to take a greater pride in their work. Why? Because they were being treated with greater respect. And finally, the overall cost of the program, even though they increased it to about $11.50--I am not sure, I think it is even above that; they were one of the first with a living wage--they found out that the workers were working harder, took greater pride in their work, and there was greater productivity, a greater increase in morale, and their overall costs have actually gone down.

States with higher minimum wages create more small businesses. I was listening to the Senator talk about the burden on small businesses. I just showed a recent Gallup Poll of small businesses which was in May of this year. Here are the 10 States plus DC with minimum wages higher than $5.15, and overall growth of small business is 5.4 percent. Forty States have a minimum wage of $5.15, and there is 4.2 percent growth. The States with the higher increase in the minimum wage saw an increase in the total numbers.

Study after study finds raising the minimum wage does not cause job loss.

This is by David Card and Alan Krueger, from Princeton's reanalysis of the effect of the New Jersey minimum wage increase on the fast food industry and representative payroll data, 1998. The increase in the minimum wage probably had no effect on total employment and possibly had a small positive effect. Four different tests of the two increases on employment impact fail to find any systematic, significant job loss associated with the 1996-1997 increases, Economic Policy Institute. Detailed studies of California's last two decades, the State-increased minimum wage legislation, consistently no employment for workers.

This chart shows the increases in 1996. It is too bad we have to go back so far, but we haven't had an increase in the minimum wage. Here is the increase in the minimum wage to $4.75. I think it was $3.45 prior to that time. We went to $4.75. This is total job growth after we had the increase in the minimum wage. Then we increased to it $5.15. This is a chart that shows the total job growth in the United States during that period. This idea about the impact on jobs is interesting, but it has been refuted time and time again.

This chart shows that the last minimum wage increase did not increase unemployment. These are the figures on unemployment.

The last increase to $5.15 actually shows the unemployment going down over the period of the years, from 1997 until 2000. It doesn't have the most recent figures. But it is a pretty good indication of what was happening during that time. So we find that the States which have a higher increase in the minimum wage are expanding in small business. Eighty-six percent of small business, according to the Gallup poll, said it doesn't have any effect, in terms of employment. The national review about what has happened the last two times we raised the minimum wage was that it had virtually no impact in terms of the employment issue.

Finally, inflation. That issue is always another canard that is pointed out. They say if you raise the minimum wage, we are going to cause inflation. Look at what we are doing, Mr. President. Increasing the minimum wage to $7.25 is vital to these workers, but it is a drop in the bucket to the national payroll. All Americans combined earned $5.4 trillion a year. A minimum wage increase to $7.25 would be less than one-fifth of 1 percent of the national payroll. There it is. No inflation, no adverse impact on unemployment. Small business feels that it doesn't impact or affect them. The studies show that small businesses have grown in States where they have had an increase in the minimum wage.

These are the economic arguments, but most of all, as we have said day in and day out, this is a fairness issue. These are men and women who work hard and play by the rules and take a sense of pride in their work. They work as teachers aides, in nursing homes, cleaning up the great buildings of American commerce, and they work hard and try to do a decent job. More often than not they have two and sometimes three other jobs. Primarily, they are women. As I have pointed out, it is a women's issue. Primarily, those women have children. It is a children and a women's issue. It is a family issue. It is a family value issue and a civil rights issue because so many of the workers are men and women of color. And fairness, fairness. You don't have an economic argument against increasing it to $7.25, and you don't have an argument that is relevant to decency and fairness in opposing this kind of increase.

Americans understand fairness, they understand decency, and they understand the importance of hard-working Americans who are playing by the rules. A job in America should get you out of poverty, not keep you in it. And the alternative to our increase in the minimum wage will keep you in poverty. We can do better as a country, and we will.

I see my friend from New Jersey who desires to address the Senate on the minimum wage. I hope he will have an opportunity to do that for as long as he likes.


Mr. KENNEDY. Mr. President, I wish to review for the Senate what has been happening to many families in this country over recent years regarding the important growth of poverty and its relationship to the minimum wage. It has a very direct relationship. The figures are rather startling. It is appropriate, when we are talking about an increase in the minimum wage, that we have some fuller understanding about the growth of poverty in our Nation over recent years.

Mr. President, 5.4 million more Americans are in poverty. We had 31.6 million in 2000, and now there are 37 million. There is a 5.4-million greater number of Americans living in poverty in the United States. Of those 5.4 million, 2.5 million are children.

It is interesting, when we talk about an increase in the minimum wage, if we look at the countries of Western Europe--take Great Britain, for example, which has the second most powerful economy in Western Europe. In October, they will increase the minimum wage, and it will go to $9.80 an hour. Listen to Gordon Brown, the Chancellor of the Exchequer, and the pride that he takes as a public servant, Chancellor of the Exchequer--effectively our Secretary of Treasury and the head of OMB combined--in having lifted 2 million children out of poverty over the last 6 years. We have put 2.5 million children into poverty in the last 5 years.

There are 5 million more Americans who are on the verge of hunger. These figures are from Food Security in the United States, USDA. These are not figures from those of us who are supporting an increase in the minimum wage. These are the figures. We have 5 million more Americans who are feeling the pangs of hunger, and the great percentage of those are children, again.

What is consistent in the last 5 years? No increase in the minimum wage, the growth of the number of people in poverty, the growth of the problems of hunger. We have Americans struggling to survive in this current economy, the Bush economy. Too many Americans are living in poverty: 1 in every 10 families; nearly 1 out of every 5 children in this country; 1 out of every 5 Hispanic Americans, and 1 out of every 4 African Americans.

This is interesting. It shows the extraordinary growth of poverty, particularly child poverty, in the failure to increase the minimum wage. So one says: What does that really have to do with the minimum wage no longer lifting a family out of poverty?

In 1965, 1970, 1975, for a period of some 20 years, we had a minimum wage that was above or at the poverty level. Republicans and Democrats did this for 20 years, and now we are seeing an absolute collapse. There was a little blip with the increase in the minimum wage, and now we are down to an alltime low, some $5,888 or less. We know that in the last 9 years, the increase to $5.15 is buying about 15 to 20 percent less. It is not only $5.15 an hour, the purchasing of that $5.15 per hour is less.

The United States has the highest child poverty rate of the industrialized world. Here it is. Of all the industrial nations of the world, we have the highest poverty rate. That obviously has something to do with what their parents are being paid. Not completely; there are other programs in these countries that are directed toward children.

The Presiding Officer, a former Secretary of Education, is familiar with what a number of these countries do in terms of trying to assist and providing special allowances for children in a number of ways. Nonetheless, what comes out of it is the fact that we have the highest child poverty rate of any industrial nation in the world.

The fact that we have not had an increase in the minimum wage is directly related to that.

Again, if you look over at this chart here, the States with the highest child poverty have the lowest minimum wages, with the exception of Pennsylvania, and that is a State with 20 percent greater child poverty than the national average but has a higher minimum wage. But the rest are basically States with lower minimum wages, a direct tie-in with the minimum wage and poverty and child poverty.

We have a chance to do something about child poverty and about poverty in this country, and we can do it in a way that is not going to endanger inflation or provide increasing unemployment or threaten the small business community.

As we have gone through this, we have seen those arguments which have been raised and which were raised again this afternoon by my good friends from Wyoming and Georgia. They are arguments I have listened to for the last number of years I have been in the Senate. The fact is that when we have had an increase in the minimum wage, no one has ever said: Let's go back, let's go back, although we are going to be faced with an alternative tomorrow to my increase in the minimum wage that will take us back, will eliminate the coverage, eliminate overtime for a number of workers, and that is unfortunate.


Mr. KENNEDY. Mr. President, earlier today we went through a good deal of the history of the minimum wage, and we also went into the growth of poverty, particularly for children and for those who receive the minimum wage. I wish to read a couple of real-life stories because I think it is always useful to understand that besides the graphs we have been able to show and the statistics we have been able to show on these charts, we also show in real terms what is happening to a lot of our fellow citizens, our fellow Americans.

This is a story from the Sacramento Bee, and I ask unanimous consent that it be printed in the RECORD in its entirety. This is June 18, 2006, last Sunday:

Monique Garcia earned minimum wage for most of a decade before becoming homeless. She washed dishes, swept floors, collected parking tickets, worked cash registers, staffed drive-through windows, and flipped burgers. Despite that, two months ago, the 26-year-old single mom found herself with too little money for rent and no place to go.

She moved with her 7-year-old daughter and 5-year-old son into St. John's, a family shelter tucked into an industrial corner of Sacramento. They share a room with another minimum-wage worker and her two young children. Garcia and her roommate trade off, one watching the kids while the other works.

It's hard, you've got a family to support and minimum wage isn't it, Garcia said last week.

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

[From the Sacramento Bee, June 18, 2006]

Life on $6.75 an Hour: When Ends Don't Meet
(By Jocelyn Wiener)

Monique Garcia, a single mother living on minimum wage, ended up homeless.

As the gulf between what they earn and what they owe continues to grow, many of the region's minimum-wage workers have turned to food banks for sustenance. Some, like Garcia, have moved into homeless shelters or cars for housing.

These workers welcome Gov. Arnold Schwarzenegger's proposal to hike the minimum wage by a dollar, to $7.75 an hour. They cheer a separate plan proposed by state legislators--and supported by many labor groups--that would ensure the minimum wage increases each year to keep pace with inflation. About 1.4 million of the state's lowest-paid workers would be affected.

California's minimum wage is lower than that of more than half a dozen states, but is higher than the federal minimum of $5.15 an hour. Washington state has the highest minimum at $7.63 an hour, and it is indexed to inflation.

California's Industrial Welfare Commission is scheduled to consider the proposals early next month. Many business groups oppose a minimum wage increase because it could force increases for higher-paid employees, as well, and might cause some small businesses to close.

According to a report published earlier this year by the California Budget Project, a nonprofit group that conducts economic and policy analysis to benefit the poor, the purchasing power of the minimum wage has dropped $0.88 since 2002, a decline of 11.5 percent.

Advocates for the working poor say earnings have slipped so far out of sync with the cost of living that the proposals are unlikely to remedy families' deep financial distress. Barring a drastic policy change, they say workers like Garcia will continue to struggle mightily under the ballooning costs of health care, transportation, child care and housing.

``I hope I am wrong,'' said Ralph Gonzalez, a social worker with the Sacramento County Department of Human Assistance. ``I hope with the increase of the minimum wage we can get it. But with all my years of experience, I really doubt it. I really do.''

Another California Budget Project report, this one released in September 2005, estimated that a single adult in the Sacramento region needed to earn about $11.61 an hour, or $24,151 a year, to cover housing, utilities, transportation, food, health care, taxes and miscellaneous expenses. They calculated that a single parent raising two children, such as Garcia, would need to earn $24.17 an hour, or $50,272 annually, to cover basic expenses.

Minimum-wage earners patch together strategies to make ends meet: some cram into one bedroom apartments shared by multiple families. Many work two or three jobs. They run up debt to pay medical bills, buy clothing at rummage sales and visit food banks when there's nothing left to eat. Many teeter on the edge of homelessness until, like Garcia, they fall off.

Garcia has round brown eyes, a long ponytail and the names of her children, Yesenia and Joshua, tattooed over her heart. Until last week, she worked about 15 hours a week at Round Table Pizza. Now she's applying at Del Taco and Wal-Mart and a discount store. She's worked full-time in the past and would like more hours, but recently hasn't been able to get them. She's afraid to take a second job because her absence already is hard on her children. For the same reason, she finds it difficult to complete the coursework she needs for a GED, virtually a requisite for most better-paying jobs.

That leaves her with about $190 every two weeks, after taxes, she said. Even with a $300 monthly check from Temporary Assistance for Needy Families for her 7-year-old daughter, and a monthly $300 in food stamps, she doesn't have enough to rent an apartment.

To even consider an application, most landlords want her to earn at least double the rent. The cheapest one-bedroom she's seen is in North Highlands, for $400.

John Foley, executive director of Sacramento Self Help Housing, said most landlords in Sacramento actually require tenants to make 2.7 times the rent. Most refuse to rent to people with any history of evictions or bad credit.

``It's legal to have those criteria,'' he said. ``But, of course, they really crunch the poor.''

He said it is especially disconcerting that workers in Sacramento cannot afford rent, because the region is relatively affordable compared with much of the rest of the state.

``We ought to be able to fix it here,'' he said. ``That's what's so shameful.''

Health care costs, which increase more than 7 percent each year across the country, also pinch the working poor. Some workers, like Garcia, receive Medi-Cal. But, for a whole host of reasons, many others are ineligible for government programs.

Marina Aguilar, an uninsured Der Wienerschnitzel worker, knows intimately the burden of medical bills. She says her husband, an asthmatic, was admitted to a local hospital overnight after a severe attack two years ago. He was uninsured, and the bill for his short stay came to $5,000. For two years, Aguilar says, she and her husband--who lays tile for a living--have paid $100 every month on that bill. So far, they've paid more than $2,000, but they still owe about $4,000 because of interest.

Aguilar, a 37-year-old mother of three, earns minimum wage working 30 to 35 hours a week. Her husband is now insured, but she is not covered by his plan. Last month, her doctor told her there was something in her breast that needed to be biopsied. The biopsy alone would cost $5,000. Her mother, grandmother, great-grandmother and sister all had cancer; the risk is clear.

``I'm worried, because if I have cancer, cancer spreads very quickly,'' she said in Spanish as she sat in her sister-in-law's lace-curtained home across the street from the Sacramento Food Bank.

Aguilar would like to use the money she earns to buy things for her 10-, 15- and 19-year-old daughters and 3-year-old grandson. She'd like to take the younger ones to Chuck E. Cheese's, maybe even on a vacation someday. She's never been on a vacation.

Low-wage work can seem, to many workers, to be a whirlpool from which they can never escape. Gonzalez, of the Sacramento County Department of Human Assistance, has another name for it: Catch-22.

Homeless people don't have alarm clocks or easily accessible showers, he said. So those workers who are sleeping in their cars, or under a bridge, often lose their jobs because they can't be presentable for work. Those who are not homeless may need to ride a bus several hours to get to work on time. They may not be able to afford the high cost of child care. Few services exist to help them, Gonzalez said.

At nearly age 60, Epitacio Leon has spent 43 years watering and tilling and picking the state's agricultural fields. His face is baked dark from decades in the sun, his fingernails are caked with earth, his bottom teeth are missing. His most recent raise, from $6.75 to $7 an hour, represents the highest wage he's ever earned.

Leon rises at 4 every morning in the tiny trailer where he lives alone. He eats breakfast, then catches a ride to the fields with another worker. By 6 a.m. he is working, irrigating tomato and sunflower fields near Woodland. He works for 12 hours, then comes home exhausted. He drinks a few beers and goes to bed.

``I'm old already,'' he said in Spanish as he sat in his niece's Woodland home last week. ``I'm tired of working already.''

If he retires now, he said, he wouldn't get enough money from the government to pay his bills.

The sounds and smells of his great-niece's high school graduation barbecue floated into the living room. Always working, never saving, Leon didn't have a family of his own. But he visits his niece's family on evenings and weekends and special occasions, and finds pleasure in playing the role of great-uncle.

On the evening of the graduation party, his 10-year-old great-nephew walked into the living room. Leon teased him a little, then asked him to bring him a beer. Then he stopped him.

``Let me see whether I have a peso,'' he said, fishing in his pocket. He pulled out a $1 and a $10 bill. He deliberated a moment before handing the boy the $10.

The boy beamed. Leon smiled a little.

It would be nice to retire some day, he said. But it won't be next year, and probably not the year after that.

The Cost of Living:

$5.15 federal minimum hourly wage.

$6.75 California's minimum hourly wage.

$7.63 Washington state's minimum hourly wage, the highest in the nation and indexed for inflation.

$11.61 hourly wage a single adult in the Sacramento region needs to cover basic living expenses.

$24.17 hourly wage a single parent raising two children in this region needs to cover basic living expenses.

Mr. KENNEDY. The stories continue along. This is happening out in Sacramento.

Here is a story about, for all intents and purposes, Christie:

Christie did a job that this labor-hungry economy could not do without. Every morning she drove her battered '86 Volkswagen from her apartment in public housing to the YWCA's child care center in Akron, OH, where she spent the day watching over little children so their parents could go to work. Without her and thousands like her across the country, there would have been fewer people able to fill the jobs that fueled America's prosperity. Without her patience and warmth, children could have been harmed as well, for she was more than a babysitter. She gave the youngsters an emotionally safe place, taught and mothered them, and sometimes even rescued them from abuse at home.

For those valuable services, she received a check for about $330 every two weeks. She could not afford to put her own two children in the day care center where she worked.

She is looking out for children, and she is unable to provide the childcare for herself.

Carolyn Payne did everything right but still can't find a job with decent wages.

She had earned a college diploma, albeit a two-year associate's degree. And she had gone from a homeless shelter into her own house, although it was mostly owned by a bank. The third objective, ``a good-paying job,'' as she put it, still eluded her. Back in the mid-1970s, she earned $6 an hour in a Vermont factory that made plastic cigarette lighters and cases for Gillette razors. In 2000, she earned $6.80 an hour stocking shelves and working cash registers at a vast Wal-Mart superstore in New Hampshire.

``And that's sad,'' she said.

She just can't make it and is in a homeless shelter. These people, our brothers and sisters of America who want to work, want to provide for their families, will do hard and difficult work. Carolyn Payne should have a greater sense of hope in the richest and the most powerful country in the world. We will give them that if we increase the minimum wage.

Mr. President, I suggest the absence of a quorum.

The PRESIDING OFFICER. The clerk will call the roll.

The legislative clerk proceeded to call the roll.

Mr. KENNEDY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

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

Mr. KENNEDY. Mr. President, I am going to describe what I understand is in the amendment which is being offered by Senator Enzi. I think it is important that we have a chance over the evening--because it looks less likely that we are going to be completing this debate tonight. We have others who are on their way over here. But I am going to review this and try to get through it, and then if I have misstated it, I hope I will be corrected.

In the last 9 years, while costs have been rising, the minimum wage has been stuck at $5.15 an hour; that is, $10,712 a year, $6,000 below the poverty line for a family of three. Since 1997, the minimum wage has lost 20 percent of its value. The Enzi proposal is a $1.10 increase--far short of making up for this lost value. It won't even make up for the lost value of the purchasing power of the existing minimum wage. It leaves behind 4.8 million workers who would be covered by the Democratic proposal because it only raises the wages of 1.8 million workers.

The raise to $5.15 was historically low, lower than any but for one increase in the 1960s. In fact, before the 1997 increase, the minimum wage had fallen to its lowest level since 1960. So we can't allow such a low increase for hard-working minimum wage workers.

Eighty percent of the 14.9 million Americans who would be affected by the minimum wage are adults, and more than a third are the sole breadwinners in their families. Minimum wage workers have waited 9 years. They deserve one that is fair.

On the issue about the 10 million Americans who will lose the minimum wage in overtime protection, first, the Bush administration and Republican leadership in Congress stripped away overtime protection from 6 million Americans. That has already taken place. That has already taken place. They have done that through rules and regulations. Now they want to deny over 10 million more workers, minimum wage workers, overtime pay by eliminating the fair labor standards coverage entirely. Do you see what I mean? If you eliminate the coverage of the Fair Labor Standards Act, you eliminate the protections for overtime pay.

Currently, all employees who work for employers who are engaged in interstate commerce, have gross annual sales of at least $500,000, are guaranteed the minimum wage and overtime pay. But even in businesses that have less than $500,000 in annual sales, employees still have individual minimum wage and overtime coverage if they are engaged in interstate commerce. The Enzi amendment would raise the $500,000 annual sales to $1 million and eliminate the fair labor standards coverage for workers who are engaged in interstate commerce. No more overtime for those individuals--10 million.

Raising the annual business threshold to $1 million and eliminating the individual coverage would force greater numbers of hard-working Americans, retail workers, security guards, garment workers, waitresses, and their families into poverty. Raising the annual threshold and eliminating individual coverage would allow businesses to pay their workers less than the Federal minimum wage and require them to work longer hours without overtime pay.

So, on the one hand, you get the $1.10 increase for 1.8 million, which will not even cover the lost value of the $5.15 since the last 9 years. Then you eliminate the overtime protections for these workers as well. Because the Fair Labor Standards Act guarantees overtime and equal pay for women and men, this exemption jeopardizes these rights for over 10 million workers.

The gross annual sales threshold was created as a way to determine that employers were engaged in interstate commerce, not as a way to exempt workers from minimum wage and overtime protection. Doubling the annual sales threshold and eliminating individual coverage would take away those protections for over 10 million workers, contradicting the long-term intent of the Congress to expand the Fair Labor Standards Act.

For over 60 years Congress has repeatedly amended the Fair Labor Standards Act to provide more protection, more minimum wage and more overtime protection--not less. This will be the first time we will see the significant reduction rather than an expansion.

Instead of trying to exclude over 10 million workers from the guarantee of a minimum wage, we should be trying to raise it. It has been more than 9 years. Americans have waited long enough.

This chart indicates raising the business exemption reverses a tradition of extending worker rights.

Congress amended the business exemption in 1961, 1967, 1969 and 1989, each time to afford more employees minimum wage and overtime protections. The current $500,000 exemption was established deliberately to cover more employees. By raising the exemption, the Republican proposal would reduce the protection for the first time.

That is very important.

I want to cover the last two points. I see the Senator from Connecticut here.

Under the Republican proposal, workers opt into the flextime system, but once they do, they do not control their own schedules. They work a 50-hour workweek when their employer tells them to, not when they choose to.

Under the current system, workers would get overtime for those extra 10 hours a week. Under the Republican proposal, they would not.

The Republicans claim the proposal would give the parent time to see a child's soccer game or attend a child's school play. They, in reality, don't get that freedom. They just get paid less for working a longer workweek.

Public sector workers also have greater protection from being coerced to agree to flextime if they don't want it. Pubic employees generally have the protection of a union contract as well as the constitutional due process protections afforded them in the Civil Service, although this administration is trying to undermine those due process rights as well. Public employees can challenge abuses of flextime within the context of those protections, whereas most public employees cannot.

As then-Governor Ashcroft explained in 1985, when the Senate was considering whether to permit flextime in the public sector:

State and local governments are qualitatively different in structure and function from private business. Public employees serve under exceptional circumstance, the most significant characteristic of which is the protection public servants enjoy because they work in government.

I am also going to add to the statement an analysis on the tip credit that would show how this effectively preempts the State from being able to make a judgment on this. This is a one-size-fits-all. It is ``the Federal Government knows best.''

If we pass it here, we preempt what Massachusetts can do, what Connecticut can do, what Georgia can do. It doesn't seem to me to be the wise course of action. We permit States to make their own judgment to increase the minimum wage because that is what it is, a minimum. It is a bottom. But this proposal is going to interfere with the States' wage policy in other ways.


Mr. KENNEDY. As all of us know, the Senator has been the chairman of the Children's Caucus here in the Senate. He is the author of the Family and Medical Leave legislation. He worked 5 years to get that legislation passed. It has been a great success. There were extensive hearings in our committee over the course of the years on children and children's needs, children's education.

Does he agree with me that we have seen this remarkable growth of child poverty in the last 5 years? The Senator has just mentioned this. I just want to underline it. In the strongest economy of the world, we are seeing a significant growth in child poverty and child hunger in this Nation, and we have seen, as the Senator pointed out, the virtual lack of increase in the minimum wage and the reduction of purchasing power.

Does the Senator join with me in recognizing what we have seen? The U.K., which is the second strongest economy in Europe, will be going to $9.80 an hour in December. Gordon Brown takes pride in the fact that they have raised 1.8 million children out of poverty in the U.K. over the period of the last 5 years. In Ireland it is $9.60, and they have raised hundreds of thousands of children out of poverty.

Does the Senator agree with me that the fact of the failure of increasing the minimum wage has had an extremely negative impact on the well-being of children in our country, resulting in the fact that there are hundreds of thousands, even millions more children who are living in poverty because we have failed to do that?

Mr. DODD. Mr. President, I say to my colleague, if he will yield back, I couldn't agree with him more. This is one of the great myths about the minimum wage increase. You will hear over and over again; in fact, we have heard it here already today: If you increase the minimum wage, this hurts business. This makes it more difficult to hire people, to employ people.

I found it rather interesting that in surveys done among the business community, particularly the small business community, 86 percent of small business owners do not think the minimum wage affects their business.

The Senator from Massachusetts is absolutely correct that raising children out of poverty is directly related to the ability of their parents to provide for them.

Again, it should not take lecturing here to my colleagues in this great body to make the case, in the 21st century, that we are going to have to have the best prepared, best educated, healthiest generation we can produce if we are going to remain competitive in a global economy. When you have 13 million of your children growing up in poverty, how are these children going to effectively compete? How are they going to be well educated? How are they going to be healthy enough not only to be good parents themselves, but good workers, and good citizens?

It seems axiomatic. It should be understood on its face. If we continue on the road we are traveling, with the number of children in our country growing up in poverty increasing, it is going to make it more difficult for our country to compete in the 21st century.

There is a graph here which I know the Senator has seen, but it makes the case of what is happening. The United States has the highest child poverty rate in the industrialized world: Denmark, Sweden, France, the Netherlands, Germany, Spain, Japan, Canada, U.K., Italy. All of these countries, major competitors in the world, do a far better job seeing to it that their children are better prepared to meet those challenges.

Our future is lagging behind when a substantial number of children are growing up, in our great country, in poverty. This is through no fault of their own. It is through the accident of birth, being born into a family where their parents are struggling to earn a decent wage and make ends meet. These are working families, by the way. These are not families collecting subsistence or some kind of charity. They are out there working, earning an income that does not allow them to meet the basic necessities of life.

Mr. KENNEDY. Will the Senator yield?

Mr. DODD. I am glad to yield to my colleague.

Mr. KENNEDY. The Senator has given just an excellent statement about what happens to children when they live in poverty. I was wondering if the Senator would comment about the growth of hunger over the last 5 years. There are 5 million more of these people now, according to the USDA, and more than 20 percent of these are children. Five million more Americans are hungry or on the verge of hunger.

I wonder, I ask someone who chaired the Children's Caucus, I ask about the fact that children are increasingly pressured in terms of the issue of hunger, what does this do to a child in terms of a child's development?

Let me add one addendum. I believe the Senator may remember what happened, I think it was in Philadelphia, where they expanded the school lunch program to include a school breakfast program. They found out that the grades of the children all went up noticeably--I think it was somewhat close to 10 percent. In any event, it was clearly noticed, as they found out, when children have decent nutrition, their performance--in terms of educationally, culturally, socially, and from a discipline point of view--is very importantly impacted. I wonder if the Senator would tell us from his own experience what he knows about this.

Mr. DODD. I thank my colleague for bringing up this chart to emphasize the point. I think these numbers are from the Department of Agriculture.

Again, the Senator is making an excellent point. If you have a hard time understanding what the Senator from Massachusetts is saying or the Senator from Connecticut, ask any teacher. Ask any teacher in this country, particularly at the elementary school level, what sort of academic performance, what sort of attention spans you have with a child who has received adequate nutrition, a decent meal, compared to those who have not. You will hear anecdote after anecdote of what happens with children who do not have proper nutrition--not to mention the growing health care problems that can emerge.

This is just good, sound investment policy. If you really care about the future of your country, if you really care about whether or not our Nation's children are going to be able to perform adequately in this century, then clearly making sure that they have the basic essentials is, again, so obvious that it should not require a debate on the floor of the Senate to make the point.

Mr. KENNEDY. Will the Senator yield for one more question?

Mr. DODD. Yes.

Mr. KENNEDY. Now we find out there is increasing hunger, and now we know it affects more than one million children.

Can the Senator tell us what he knows about Americans and their degree of support to relieve the hunger of children? It is truly overwhelming, is it not?

Mr. DODD. It is not surprising but it is worthy of being repeated.

Ninety-four percent of our fellow citizens across this country, regardless of geography and economic circumstance, of gender, ethnicity, whatever the differences may be, agree with the following quotation: People who work should be able to feed their families. Ninety-four percent subscribe to that notion.

The Senator from Massachusetts is talking about working families. Our fellow citizens believe that if you are a working family, you should be able to make enough money to feed your family.

This is the United States of America. This is not some Third or Fourth World country we are talking about. Yet with 37 million of our fellow citizens, adults and children, unable to meet the requirements of basic food and nutrition, it ought to stun everyone in our country.

What we are trying to do is make it possible for these people who are working hard to be able to provide for their families. That is all we are talking about.

I point out to colleagues who have offered an alternative to this proposal, that a $1.10 per hour increase to $6.25 per hour over the next 2 years, means that millions of children would be left behind.

What the Senator from Massachusetts is offering--with a bipartisan group of support, we hope--is a $2.10 per hour increase to provide for the needs of working families. What the Senator from Massachusetts has laid out I couldn't agree more with him. If you are truly interested in making a difference in this country, that extra $1 per hour could make a huge difference in the ability of these families to make ends meet.

Among full-time, year-round workers, poverty has increased by 50 percent since the 1970s. Minimum wage employees working 40 hours a week, 52 weeks a year are earning $10,700 a year. That is almost $6,000 below the Federal poverty guidelines of $16,600 for a family of three--$6,000 less than you ought to be able to have if you are going to meet the poverty guidelines.

Here we are in the 21st century, and the minimum wage is losing its value as well. Since the minimum wage was last raised nearly 10 years ago, its real value has eroded by 20 percent. Minimum wage workers have already lost all of the gains from the 1996-1997 increase.

Today, the real value of the minimum wage is more than $4 below what it was in 1968. To have the purchasing power it had in 1968, the minimum wage would have to be more than $9.25 per hour--not the $5.15 we are currently at.

I want to make a point as well about what the impact of this minimum wage increase would have on the lives of working families.

Nearly 15 million Americans would benefit from the minimum wage increase to $7.25 per hour. That is 6.6 million people directly affected in a positive way and another 8.3 million affected indirectly. Almost 60 percent of these workers are women, and 40 percent are people of color. Eighty percent of those who would benefit are adult workers, not teenagers seeking pocket change, as some have said, and more than a third of these are adults are the sole providers for their families.

Again, we are talking about an increase to $7.25 per hour, which is still hardly enough to make ends meet when you consider the cost of food, clothing, housing, not to mention the skyrocketing cost of energy that has hit everybody in this country. We all know how hard it is to provide for our families.

If you raise the minimum wage to $7.25 per hour, it would mean an additional $4,400 a year. That additional money would be enough for a low-income family of three to buy 15 months of groceries which they couldn't otherwise get, 19 months of utilities which they would not otherwise be able to afford, 8 months of rent, over 2 years of health care, 20 months of child care, 30 months of college tuition at a public 2-year college. Consider those numbers--20 months of child care that these working families need if they are going to keep their jobs and keep their children safe, not to mention 30 months of college tuition. It may not seem like much, but it is important.

In 10 years, the person earning minimum wage has received no pay increases, unless they have been lucky enough to live in a State that increased the minimum wage.

But for most of our fellow citizens, that has not been the case. And we now have nearly 40 million of our fellow citizens living at or below the poverty level.

I repeat this because I know my colleagues care so much about it. To have 13 million of our children in this country who, except by accident of birth, have found themselves living under these circumstances and having to survive at that level is unacceptable.

This is the United States of America. We ought to be doing far better.

To find out, as we recently pointed out on the chart, that almost every other industrialized country in Western Europe is doing far better by their children, far better by their minimum wage workers, ought to be a source of collective embarrassment for this great country of ours.

I don't think I have to make this case too often. We know how difficult it is going to be to compete in the 21st century. If we don't have a generation coming along that is well educated and well prepared to meet the challenges of the 21st century, it is going to be hard for Americans to remain strong and competitive.

You just have to read about what is happening in our major competitive countries. We take great pride in 60,000 high school students in this country who competed last year in the science fair, a great number. Compare that with 6 million who competed in the same science fair in the People's Republic of China last year.

That is the challenge of the 21st century.

With 13 million kids in this country going without getting a decent meal every day, we are going to have a real problem on our hands if you do not begin to address that.

I feel strongly about this and I wish we could reach agreement quickly. I remember the days when the minimum wage increase was done by a voice vote. We worked out the differences and sat down and negotiated, and it was passed unanimously on a record vote or a voice vote. How sad it is

that we have come to this, where nearly a decade later we are sitting here arguing with each other about whether 15 million of our fellow citizens could get a bump of $2.10 per hour up to $7.25 an hour.

This ought to be something we can all agree on and not engage in this kind of acrimonious debate.

I want to point out, as well, that there are other provisions that will be offered by the majority that are very troublesome to me, including a fundamental change in the overtime pay schedule that I think is very unfair to people. This goes beyond the minimum wage worker. Here we have always provided that if you work more than a 40-hour week in that week, then you get time and a half. That has been Federal law. We are now saying we are going to apply a 2-week standard. An employer could have you work 50 hours in 1 week and 30 hours in the next. That is 80 hours, but for the 10 hours more in the first week, you don't get the additional pay.

That is unfair to a lot of people in this country. If you work an additional 10 hours in a week, that can be hard labor, and you ought to get time and a half. The law requires it. That would be a $3,000 per year pay cut for a median income worker and an $800 pay cut for minimum wage workers. That additional 10 hours of overtime pay could make a big difference.

I don't know why the majority decided to add that provision. It seems to me that is unduly harsh to an awful lot of people.

We talked about the poverty level working with the minimum wage. I am talking about people who are above the poverty level but are struggling and don't have to be making $16,000 or $10,000 to be struggling in this country. You could be making $40,000, $50,000 or $60,000 a year. If you are a family of four, you may very well be struggling, considering the cost-of-living increases that have gone on. For that man or woman who works an additional 10 hours a week, 10 hours away from their families after putting in 8 hours a day, 5 days a week, that additional 10 hours can be hard. And to say I am not going to give time and a half for those 10 hours I think is unfair to those people.

If that ends up being adopted, I think it is a great step back as well.

I hope we will adopt the proposal that the Senator from Massachusetts has offered. I commend him, once again, for making a strong case.

Again, on behalf of 13 million children in this country, and million of people who are out there struggling tonight to take care of their families, to raise good families, I urge adoption of the amendment being proposed by our colleague from Massachusetts. I hope it will be adopted by our colleagues when voted on tomorrow. It is an important contribution. Nine years is too long to wait for an increase in the minimum wage.


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