National Defense Authorization Act for Fiscal Year 2007

NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2007 -- (Senate - June 21, 2006)

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Mr. SARBANES. Mr. President, I thank the distinguished Senator from Massachusetts and my colleague, the able Senator from Connecticut.

Mr. President, this is an extremely important issue before us. The last time the minimum wage was raised was in September of 1997. If we fail to increase the minimum wage before the end of the year, we will have gone the longest time without adjusting it since it was first enacted in 1938. That is a dismal performance on the part of the Congress.

Since 1997, inflation has drastically reduced the purchasing power of the minimum wage. It is now the lowest it has been in more than 40 years. To match the last increase, in terms of purchasing power, the minimum wage would have to be increased 25 percent above what it is now. And as we fail to act, the purchasing power of the current minimum wage continues to be eroded by the steady march of inflation--contributing to two serious problems in our society, rising poverty and increased inequality.

Thirty years ago, a worker paid the minimum wage who worked 40 hours a week for 52 weeks made enough to keep a family of three out of poverty. Now that worker is 35 percent below the poverty level.

People at the bottom of the wage scale have been falling further and further behind the rest of the workforce. In the 1950s and 1960s, the minimum wage averaged about 50 percent of the average wage. Today, at $5.15 an hour, the current minimum wage is only 31 percent of the average hourly wage. If we fail to act, minimum wage earners will continue to fall further behind.

Nearly 15 million Americans would benefit from raising the minimum wage to $7.25 an hour. 6.6 million would benefit directly because they make less than $7.25 an hour. Based on past experience with minimum wage hikes, another 8 million who make a little more than $7.25 an hour should enjoy a wage increase as well.

There are those who say only teenagers benefit from an increase in the minimum wage. However, eighty percent of the workers who would benefit from raising the minimum wage--12 million of those 15 million workers--are adults.

As Congress fails to act, States are raising the minimum wage themselves. My own State did that last January. And various studies indicate that job growth has been faster in the States that have raised the minimum wage than in those that have not raised the minimum wage. Economic studies by leading economists found that increases such as the proposed minimum wage hike would not reduce employment, which is an argument that is made against this amendment.

A hike in the minimum wage, in fact, has been found to reduce turnover of employees which has several advantages. You get a more experienced and productive workforce, lower costs for recruiting new workers, and lower costs for training new workers.

In fact, a letter in support of raising the minimum wage was signed by over 500 economists, including four Nobel laureate winners.

Last week, the House Appropriations Committee accepted an amendment offered in the committee by my able colleague, Congressman Hoyer, to raise the minimum wage to $7.25. It was accepted by the committee on a bipartisan basis. The bill had been scheduled to come to the House floor this week, but it has been pulled from consideration. News reports suggest--I hope wrongly--that the House leadership wants to avoid a debate on the minimum wage until after the November elections.

Mr. President, we should pass the Kennedy amendment to raise the minimum wage. It will lower poverty, reduce inequality, and provide vital income gains to 15 million workers and their families.

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