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Fair Minimum Wage Act of 2007

Location: Washington, DC

FAIR MINIMUM WAGE ACT OF 2007 -- (Senate - January 22, 2007)


Mr. KENNEDY. Mr. President, I say to the Senator from West Virginia and to the Senator from North Dakota as well as the Senator from New Hampshire, this has been an enormously important 2 hours in terms of the discussion and debate about the proposal of the Senator from New Hampshire. Over this period of time I am very hopeful our colleagues paid close attention to this debate because it is an extremely important issue that stretches the whole question of constitutional powers, the relationship between the Executive and the Congress.

We have had these individuals speak to this issue. They are knowledgeable, thoughtful colleagues who have spent a good deal of time on this matter.

It is of enormous consequence, the outcome of this proposal. I am enormously appreciative particularly of Senator Byrd and Senator Conrad for the excellence of their presentation and for the extremely convincing arguments they have made. The power of their arguments I find enormously compelling, and I hope our colleagues will consider it favorably as they make up their minds when we vote on this issue on Wednesday, the day after tomorrow.

This has been an extremely important debate. I am grateful to those who have participated in it. I thank, in particular, again, the Senator from West Virginia who is constant in his commitment and protection of the Constitution and the protection of the Senate as our Founding Fathers saw it and believed in it and chartered it in the Constitution. We are extremely grateful for this debate and discussion. I personally thank the Senator from West Virginia for bringing such clarity and recall of historical importance to this debate and discussion over the period of the last 2 hours. We are very grateful to him as we always are when he talks about the role of the Senate and also about the division of powers under the Constitution. We thank the Senator.


Mr. KENNEDY. Mr. President, we now bring the focus and attention of the Senate on an issue of enormous importance and consequence to working families in this country. Americans understand the issues of fairness. They understand the importance of work. Americans have believed, for a long period of time, if you work hard and play by the rules, you should not have to live in poverty in the United States of America. They have supported, Republicans and Democrats alike, a fair minimum wage over the period of the last 70 years. Republicans and Democrats alike have supported that concept, which is basic and fundamental in terms of a free society and a free economy. That is the issue we are going to address today because over the period of these last 10 years, we have had intense opposition from Republican leadership over an increase in the minimum wage.

Now, with the change of leadership in the House of Representatives and the Senate of the United States, our Democratic colleagues, with Speaker Pelosi, and now with Senator Reid, have put this issue of fairness before the Senate as a priority issue.

We welcome the opportunity to address it. It is one that is easily comprehensible, and it should not take a long time to debate. There are still those in this body who oppose it, and we expect to have amendments to try to undermine this very simple and fundamental concept of saying to those individuals who are at the bottom rung of the economic ladder: If you work hard and play by the rules 40 hours a week in the United States of America, you ought to at least be able to have a wage so you are not going to continue to live in poverty. We are also trying to say, if you have a minimum wage job, that should not condemn you to a life in poverty.

Now, let me go back over what this minimum wage is all about and give some sense about who is affected by the minimum wage and what has happened to it in recent times.

This chart reflects where the minimum wage has been in terms of its purchasing power from 1960 to 2005. If you look at where we are, as of 2005, you see a steady decrease in the purchasing power of the minimum wage worker, who today earns $5.15 an hour. If you look back, again, in terms of the purchasing power of the minimum wage worker in the 1960s, it was about $7 an hour. It was close to $9 in 1967, 1968. And then it went along, and still the purchasing power was about $7 an hour. Then we saw the gradual decline through the 1980s. In spite of our efforts to get President Reagan to increase the minimum wage, we were unable to do so.

Then, we had two times where we got a very modest increase in the minimum wage, in 1991 and then again in 1997. But we have not seen an increase in the minimum wage in the last 10 years, and we have seen the purchasing power of the minimum wage worker reach perhaps its all-time low at the present time.

This red line on the chart indicates, with the passage of the increase in the minimum wage over a 2-year period, bringing it to $7.25, it would still be below the purchasing power of the 20 years between 1960 and 1980, but at least it would give increasing hope to millions of Americans who are working at the minimum wage.

This issue of the minimum wage is a women's issue because so many of those who receive the minimum wage are women. So it is a women's issue. So many of those women have children, so it is a children's issue and a women's issue. It is a family issue because how that family is going to live, depending upon where the minimum wage is, how that child is going to be brought up, is going to depend on what that parent is able to provide for that child.

So it is a women's issue. It is a children's issue. It is a civil rights issue because so many of those who enter the job market, who enter it at the minimum wage, are men and women of color. So it is a civil rights issue, a children's issue, a women's issue, and, most of all, a fairness issue. That is something the American people can understand.

This chart shows what has happened to productivity in the United States. Generally speaking, if you look back over the years of 1960, 1965, 1970, 1975, we see that the minimum wage related to the increase in productivity. As workers became more productive, an important part of that increased productivity was passed on to the workers themselves, as it should be in a fair society.

But what we see at the present time is that the productivity has increased 165 percent over the period of the last 45 years, and the minimum wage, in terms of the total purchasing power over that period of time, has actually gone down. The minimum wage has not only not kept up with productivity, it has even fallen further behind. Productivity was always the issue to be judged when we had debates on the minimum wage years ago that asked: What has happened to the increase in productivity? We can justify an increase in the minimum wage in terms of wages if they produce more. We have seen a dramatic increase in productivity but virtually no increase and a decline in the purchasing power of minimum wage workers.

Here we see the real minimum wage decline: Twenty percent in the 10 years of Republican opposition. The value of it in 1997, $13,448; in 2007, $10,700--$6,000 below the poverty level for a family of three.

And this chart shows the Federal poverty level in this country in 1960, 1965, 1970, 1975, all the way through 1980. For 20 years, this country said: OK, we will have a minimum wage, and we will keep it at least at the poverty level so individuals will not fall behind. If they work hard and play by the rules, they at least will not have to live in poverty. As this chart shows, we see now it is $6,000 below the poverty level for a family of three who is earning the minimum wage.

Since 1980, we have only had two increases in the minimum wage. Now, in the last 10 years, we have had none. That is the issue. Having to take the time to try to go through this and explain why we need an increase in the minimum wage, and why we are going to hear from the other side, those who are in opposition to it, is extraordinary to me with these figures.

Look what has happened. If we try to measure poverty in the Bush economy between 2000 and 2005, there are 5.4 million more people living in poverty today than in the year 2000, largely because of the failure of the Congress to increase the minimum wage. These are the figures. These are the statistics. They do not talk about real lives, how these people struggle. They do not tell about the lost dreams of these families. They do not talk about the shattered conditions of the children who are in these kinds of conditions.

There are 5 1/2 million new people who have gone into poverty in the United States of America, the strongest economy in the world, basically as a result of the failure to increase the minimum wage.

Look what has happened to children. There are 1.3 million more children in poverty today than we had 5 years ago--1.3 million more children in poverty today--primarily because of the failure to

increase the minimum wage.

Well, we have to ask ourselves: Where are we as a country and a nation in terms of child poverty? Look at this chart. Of all the industrialized nations of the world, the United States has the highest child poverty rate--the highest poverty rate for children in the industrialized world. There are the figures. There are the statistics. It is not even close, and it is going up.

While we are having the extraordinary profits on Wall Street, what is happening on Main Street? What is happening in the small communities, small farms, small towns, and in the major urban areas of this country? What is happening to the children of this Nation? There is not a person in this Chamber who, in the last 5 days, has not made a speech about how our future is about our children. Everyone goes out and talks about the importance of our children in our democracy and our country. Look what is happening. They talk about it and refuse to do something that can make a big difference. That is child poverty.

When you look at child poverty and look over the figures and statistics, there is nothing terribly surprising about this, with a national average of 17.6 percent. We see who takes the major burdens, the Latinos and African Americans, those women and children of color. We are trying to talk about one country and one society, one history, and, nonetheless, we see the growing disparity in the increased number of families in poverty, the disparity with the increased number of children in poverty, and the disparity between the various communities in our Nation.

Is this what this country wants? We are not saying that the total answer is the increase in the minimum wage, but it makes a major difference. And we can show you, and will show you, why that is so.

We see the figures now in terms of what has happened in terms of statistics. But what does this mean on some of the issues that relate to the conditions of our fellow citizens? Let's take the issue of hunger. Not many people are talking about the challenges and the problems of hunger in our society. This is from the USDA, household food security in the United States, pointing out the increasing number of families who are on the verge of hunger in our economy has increased by 2 million. In the industrialized world, we are No. 1 in child poverty, and we see an increasing number of our fellow citizens in terms of hunger.

How does that impact in terms of children? Mr. President, 12.4 million children are hungry now every single day in the United States of America, and that number is growing. We can look at the number of children who go to bed hungry at night. This quote is from Lisa Hamler-Fugitt, who is the executive director of the Ohio Association of Second Harvest Foodbanks:

Thirty-five percent of the people that we serve are children.

Thirty-five percent are children.

I see these children, and I think what are we teaching them? That in America, you can work 40 hours a week and still not earn enough to buy food?

That is what is happening. That is what is happening in the United States of America now, today. And we have to spend hours in this body, after we have had the adequate pay increases of $30,000 for Members of Congress in the last 10 years, and try to convince people to go to a $7.25 minimum wage? And we are going to hear opposition to this? This is what is happening out across this country.

So we know what is out there in terms of hunger, how this reflects itself, the fact that they are not getting the adequate income, how it impacts particular children in our society.

This reflects, at no surprise to anyone--this is the National Low Income Housing Coalition--about how many hours you have to work at the minimum wage to be able to afford a two-bedroom apartment. This is for an average family of three. These are the hours you have to work in 1 week. You would have to work 229 hours a week in my State of Massachusetts at the minimum wage to be able to afford it; 140 hours a week down in Louisiana. Across the country, out in the Southwest, we are looking at New Mexico; Arizona, 149 hours a week; Missouri, 119 hours a week; even Wyoming, 112 hours a week.

This illustrates pressures on these families, their difficulty to be able to provide food for their children, let alone providing for their housing.

The increase, this is how it reflects itself. We propose an increase in the minimum wage to $7.25. This is what it means. It means 2 years of childcare for a minimum wage family. It means full tuition at a community college. This is what it could mean to a family. It means a year and a half of heat and electricity. We have seen the reductions in the fuel assistance programs in the recent times, which has been devastating in my part of the country. It means more than a year of groceries. It means more than 8 months of rent.

This might not make a big deal of difference to a lot of people, but it makes an enormous amount of difference to these families who are earning the minimum wage. This is how it reflects itself: a year of groceries, 8 months of rent, a year and a half of heat and electricity, tuition at a community college--an opportunity for hope for some of these individuals--and also 2 years of childcare, to help with the problems in terms of childcare, the difficulty that these families have in trying to work for the minimum wage and have someone who is going to care and look out for their children. There are heartrending stories to that effect.

This chart reiterates the fact that the great majority, 60, 61 percent, of those working are women, so it is primarily a women's issue. Great numbers of those women have children, so this is a special issue for women.

Here we show that about 1.4 million single parents, most of whom are women, would benefit from an increase in the minimum wage. Some will say, on the one hand, it doesn't affect all that many people. Then why not have an increase in the minimum wage? It doesn't, in terms of the percentage increase in the total payroll of this country, it is infinitesimal, an increase in the minimum wage. I will come to that in a minute. But don't tell me it doesn't make a great deal of difference to the over 1 million single parents, most of whom are women, who would benefit from an increase in the minimum wage.

This tells the story of Diana, a single mother of three from Buffalo, who works for a childcare center, making the minimum wage. She has to rely on food stamps and Medicaid to provide for her family. Increasing the minimum wage will allow her to ``decrease her reliance on government subsidies and ..... pursue her dream of self-sufficiency and a better life for herself and her family.'

It is interesting, the fact that if we do not increase the minimum wage, we are effectively subsidizing many businesses. Because these families are eligible for food stamps or maybe some could get some fuel assistance, other kinds of support services, who do you think is paying for those programs? Working families. So you get a decent minimum wage out there, and it reduces the pressure on those programs. That means less pressure on our working families who are going to have to pay in.

The increase in the minimum wage will benefit more than 6 million children whose parents will receive a raise. Six million children in this country will benefit because of the increase in the minimum wage. It is a children's issue, a women's issue. This is what this is about.

What happens when children are living a better quality life? Look at this chart: Better attendance, concentration and performance at school, higher test scores and graduation rates. We are going to be debating No Child Left Behind. We are going to be wondering how we can make a difference in terms of children in our schools. There are a number of things that can make a difference to the children: a qualified teacher, classrooms where children can learn, supplementary services, parental involvement. A number of things can make a difference to the children. But one thing we know for sure: If the children can't see the blackboard, if they need glasses, or they can't hear a teacher because they need some kind of help, we tried to do this with the CHIP program to help them. In the CHIP program, it is not required, but a lot of States do provide those. But if the child is going to be hungry, the child is not going to pay attention. We have all kinds of examples for that. We will mention that at another time.

But 6.4 million children will benefit from an increase in the minimum wage: better concentration, performance at school, higher test scores, higher graduation rates, stronger immune systems, better health, fewer expensive hospital visits, fewer run-ins in the juvenile justice system--investing in the children. Again, 6.4 million will benefit from an increase in the minimum wage, and this will be part of the benefits that will come from those increases.

We have seen a higher minimum wage improves children's futures. For families living in poverty, a $400 increase in family income will dramatically increase children's test scores. This is from the Institute of Research on Poverty, on reading and math. This shows the difference in terms of the test scores. Children who are going to be fed, children who are going to have the kind of support do better in schools.

We mentioned earlier the problems of poverty falling disproportionately on those individuals of color. This chart shows that individuals of color benefit from the higher minimum wage. People of color make up 36 percent of all minimum wage workers. If we are able to get an increase in that, it will obviously benefit them.

We talked about children for a time and the impact it has on children. I will spend a few minutes talking about the number of elderly struggling with the problems of poverty. The number of elderly struggling will increase dramatically over the next several years. The best estimate--and this is by the Nation's poor, near-poor older population; it is a very important and significant study--shows the number of elderly who are going to live in poverty, increasing some 41 percent over the period of the next years. And we can understand that because we see the decline in wages according to age. This chart shows declining wages for men as well as women, all set in motion, again, by the issue about where they are going to start off on the minimum wage. So we are going to have significant increases.

This is the RAND study in terms of our seniors who are going to be living in poverty. They will certainly benefit from this.

Here is an elderly worker, Peggy Fraley, a 60-year-old grandmother from Wichita, KS, who works as a receptionist for $5.15 an hour. She lives with her daughter, who also earns the minimum wage, and her five grandchildren. She says: We can barely make it, but we have each other. That is richer sometimes.

This has a real impact. We have been talking a lot about statistics, but it affects people in the most basic and fundamental ways.

Over the period of these recent years where the Senate has failed to act, a number of States have moved ahead. You will see on this chart the red

States are the States where they have a minimum wage which is higher than the Federal. These are red States as well as the blue States, with the minimum wage at or below the Federal level. This is what has happened in the country over the period of the last 10 years.

Now let's see, we have pointed out what has been happening in terms of children, people living in poverty, children in poverty. High minimum wage States, meaning those we have just mentioned here that have had some increase in the minimum wage, have lower poverty rates. That should not be surprising. It is all true. You can take it right across the line. The States that have increased their minimum wage are all below the national average in terms of the poverty rate, 12.7 percent. So this has a real impact. And look at what it has with regard to child poverty rates. Remember, I mentioned we are the No. 1 industrial society with the number of children living in poverty. Look what happens in the States where we have actually increased the minimum wage. Just about every one of those is below the national average on child poverty. Increasing the minimum wage has a real impact in terms of child poverty in this country.

I will show what has happened in some other countries. I will show what has happened in other States. Let's see what happened in other countries. We always hear, well, if we do this, it is going to be a disaster to the economy and, therefore, we can't afford to have that because we are going to lose jobs or we will slow down the economy. We are going to throw those people out of work we are trying to help. We are going to hurt their community and we will hurt their families. Right? Wrong.

Let's look at the two countries which have raised their minimum wage the most over the last 5 years. That is Great Britain and Ireland. What are the two countries in Europe that have the best economies? Britain and Ireland. What are their minimum wages? Great Britain is now $10.57 an hour. Ireland is $10.80 an hour. And what has been the result? They have the strongest economies and the second strongest economy, and Britain has brought 2 million children out of poverty. Ireland has reduced its number of children who are in poverty by 40 percent. Look at this: Child poverty, dramatic increase in the minimum wage. They have a strong economy and a dramatic reduction in child poverty. And here we have an increase in child poverty, keeping the minimum wage.

Look at what has happened in terms of Great Britain. They have taken 2 million children out of poverty, and we have seen 1.4 million children go into poverty. Five years ago, Great Britain had the highest number of children in poverty of any of the European countries. And Tony Blair, to his credit, said: We are going to do something about it, and we are going to effectively eliminate child poverty in this decade. They are well on the way to doing so, demonstrating what we have said. That is, you can make a difference with regard to children. You can make a difference in terms of the issues of poverty by increasing the minimum wage.

Now let me take the States. What has happened to the States? You can say that is interesting, what has happened in those countries. But let's take a look at the States that have had an increase in the minimum wage. States with higher minimum wages create more jobs. This is from the Fiscal Policy Institute, March 30, 2006, overall employment growth from January 1998 to January 2006. In the 11 States with a minimum wage higher than $5.15, it has been 9.7 percent. In States with the minimum wage at $5.15, it is 7.5 percent. I thought if you raised the minimum wage, it was supposed to go down. You weren't supposed to grow as fast. And you weren't supposed to have increasing employment. But quite clearly, this isn't the fact.

Let's take the States where they are creating businesses. People say, if you raise the minimum wage, we are going to put a lot of businesses out of work. Is that right? No, that is wrong, too. Here are the 10 States with a minimum wage higher than $5.15. States with higher minimum wages create more small businesses. Overall growth in the number of small businesses, 1998 to 2003, 5.4 percent where you get a minimum wage higher than $5.15, and 4.2 percent where they have had $5.15--more employment, more growth of businesses. This is the result, if you look in other areas as well.

This is States with higher minimum wages on retail jobs. In States with a minimum wage higher than $5.15 an hour, the employment growth is 10 percent in retail jobs; 3.7 percent where the minimum wage is $5.15.

We don't expect the NFIB to support this proposal. But what we do find is that many employers and small businesses do. Malcolm Davis supports raising the minimum wage. This was in the News Observer, a newspaper. He is a small business owner, is proud to say:

My lowest paid employee makes $8 per hour. With only 11 employees, things are tight, to say the least. If I can find a way to be fair with my employees in rural eastern North Carolina, why can't our government? Try driving to work and raising a family on the minimum wage.

This is more typical than not, Mr. President. Look at this. This is a Gallup Poll of May 9, 2006. Eighty-six percent of small business owners say the minimum wage doesn't affect their businesses. Question: How does the minimum wage affect your business? Eighty-six percent say no effect. Gallup Poll, 2006. Positive effect, 5; negative effect, 8 percent.

Let's look at what has been happening in our country over the period of the recent years in terms of the tax incentives. I think we ought to have an increase. I am going to vote to increase the minimum wage without providing additional kinds of tax incentives. All this proposal does basically is recover the purchasing power we had 10 years ago. There is no reason--we have seen countries that have raised the minimum wage doing very well--why we should add more tax breaks and increase the deficit. Businesses receive billions of dollars while minimum wage workers receive nothing.

This chart is from Citizens for Tax Justice. That is over the last 10 years. There has been $276 billion in tax incentives for corporations--small businesses, $36 billion--and we have had no raise for the minimum wage workers. We are still being asked now to do more when we have seen these kinds of tax breaks for corporations and businesses. I don't think it is necessary that we provide the additional tax breaks. Here we have seen productivity and profits skyrocket while the minimum wage plummets.

This comes from the Bureau of Labor Statistics. Profits are up over 45 percent; productivity, total 29 percent; and the minimum wage and output per hours are down 20 percent. So it gives you an idea about what has been happening out in the economy just generally.

Mr. President, I think this is, above all, a moral issue. The members of our great faiths have all spoken clearly about this issue. Here is the quote from Justice Roll, January 2007:

More than 1,000 Christian, Jewish, and Muslim faith leaders say minimum wage workers deserve a prompt, clean minimum wage increase with no strings attached.

They make an excellent statement, and it is a convincing one.

Mr. President, these give you at least some idea of what is at issue. We have tried over the few minutes that we have had to point out where the trend lines are, to show the statistics that show that an increase in the minimum wage is morally correct. It will strengthen our economy, and it will make a difference to children and to women and make a difference to men and women of color. It is basically a fairness issue. It will strengthen our economy. It is the right thing to do. It is long overdue.

I thank our Democratic leaders, Speaker Pelosi and Senator Reid, for giving it the high priority it deserves. We ought to get about the business of getting this legislation enacted, and enacted speedily, for those individuals who are out there day in and day out, men and women of dignity and men and women of pride, who take a sense of pride in the job they do, even though the jobs are very menial. Maybe it is a teacher's aide or someone looking out after the elderly in elderly homes or someone cleaning out the buildings of American commerce. They are men and women of dignity, and they take pride in the jobs that they do.

America has said it values work, and America says it values individuals who want to work hard and play by the rules. We are calling upon this Senate now to say these working families have waited long enough. Those individuals who work 40 hours a week, 52 weeks of the year in this Nation of ours should not have to be condemned to living a life in poverty.

That is the issue. Does work pay? Do we recognize our fellow citizens and say that we are going to respect them and we want to be one country with one history and one destiny, one Nation? Let's pass the increase in the minimum wage.

Mr. President, I thank my friend and colleague, Senator Enzi, for all of his good work. There are a great many issues on which we agree; there are some on which we differ. I always value his insight on any of these issues and, needless to say, we enjoy working together. I thank him for all of his cooperation on this issue, as on many other issues. We give assurance to our friends in the Senate that we are going to get a lot of good work done for the people of this country in this session.


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