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Fair Minimum Wage Act of 2007

Location: Washington, DC

FAIR MINIMUM WAGE ACT OF 2007--Continued -- (Senate - February 01, 2007)


Mr. KENNEDY. Madam President, as I have said during the course of the last 9 days, on this side of the aisle we are prepared to go ahead and vote. We have been prepared to vote since the first day we were on this legislation. It only took 4 hours for the House of Representatives to debate this issue and then to proceed to a vote. We have been on this for 9 days. We have debated an increase to the minimum wage 16 other days since the last increase. Twenty-five days of debate about the increase in the minimum wage. Imagine that, 25 days taking up the time of the United States Senate.

With all the challenges we face in education, in energy, in health, and jobs, all the challenges we are facing in terms of environmental issues and foreign policy issues, we have spent 25 days on whether we are going to increase the minimum wage. Twenty-five days during this period of time. On this side, we are prepared to move ahead. We are prepared to move ahead.

The President of the United States made this talk yesterday on Wall Street, and it was well received and cheered on Wall Street, as he talked about how well the economy has been proceeding. Well, I took a few moments earlier in the day to talk about the increase in the number of families who are living in poverty. We have close to 2 million more children living in poverty today than we had 5 years ago. Two million more families living in poverty than we had 5 years ago. That is according to the census. That is not some speech writer's concept, those are hard facts.

President John Adams, one of our great Founders, said facts are stubborn things. Those numbers are stubborn things. Facts speak. Increased numbers of Americans have gone into poverty over the last 5 years, with an increase in the number of children who have gone into poverty.

Other countries have addressed the problems of poverty and have lifted children out of poverty, lifted families out of poverty, and most of them have used an increase in the minimum wage to do it. You have to understand the problem in order to address it, and this President, evidently, doesn't understand the kinds of pressures that are on working families and middle-income families.

Members of some of our great churches in this country have strongly supported the increase in the minimum wage. We have over 1,000 different organizations that have supported the increase in the minimum wage. I have included most of their letters of support in the Record.

Here is one from the Urban League:

Passing this wage hike represents a small but necessary step to help lift America's working poor out of the ditches of poverty and onto the road toward economic prosperity and will narrow the financial gap between Americans of color and whites.

That is the National Urban League president, President Morial.

Here we have an extraordinary group of business owners and executives for a higher minimum wage. They are some of the large companies in the country and some of the small companies. It is six pages long in terms of the companies themselves, ranging from Mr. Alex Von Bidder, president of the Four Seasons Restaurant in New York, a very high-cost restaurant, to some of the small mom-and-pop stores, but all of them expressing the view that:

We expect an increased minimum wage to provide a boost to local economies. Businesses and communities will benefit as low-wage workers spend their much-needed pay raises at businesses in the neighborhoods where they live and work. Higher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, improving product quality, customer satisfaction, and company reputation.

In a recent National Consumers' League survey, 76 percent of American consumers said how well a company treats and pays its employees influences what they buy.

I also have a letter from the president of Catholic Charities, Father Larry Snyder, and included in his letter are these words:

Over the last several years, our agencies have been coping with steady increases of 20 percent each year in requests for emergency assistance because low-wage workers simply cannot earn enough to cover rent, child care, food, utilities, and clothing for their families. Many people served by Catholic Charities agencies are poor despite full-time employment at the bottom of the labor market: cleaning houses and office buildings, harvesting and preparing food, watching over children of working parents. They contribute to our Nation's economic prosperity. Yet the current minimum wage leaves them nearly $6,000 below the poverty line. People who work full time should not live in poverty.

Then he continues:

Our Catholic tradition teaches that society, acting through government, has a special obligation to consider first the needs of the poor. Catholic social teaching tells us that a just wage is not just an economic issue--it is a moral issue. The United States Conference of Catholic Bishops stated in its pastoral letter, Economic Justice for All, ``all economic institutions must support the bonds of community and solidarity that are essential to the dignity of persons.'

The dignity of persons, that is what the increase in the minimum wage is about. It will help those 6 million children get a chance to maybe buy a book and read a little more, maybe even participate in a birthday party, maybe have a chance to spend a little more time with their parent because their parent will not have to have two or three jobs. Here they are talking about the importance of dignity, ``essential to the dignity of persons.' That is what this debate is about, the dignity of persons.

And the list goes on. Virtually all of the churches of faith have all recognized the importance of this issue, and interestingly, they have all pointed out what this letter says from Catholic Charities; that over the past several years their agencies have been coping with steady increases of 20 percent each year in requests for emergency assistance because low-income workers simply cannot afford the necessities.

That is true about my food bank in Boston. I was there just a few weeks ago talking to those who run it. It is an extraordinary institution. They have the same kinds of demands. We hear it all over the country. Yet we have the President talking on Wall Street about everything is fine.

So what are some of the facts? We are finding out what is happening. First of all, the Bush economy fails American families' wallets. This is the median household income: $47,599 in 2000 and $46,326 in 2005. These numbers are from the Bureau of the Census. Imagine people opening up their newspapers and seeing the pictures of the President being cheered on Wall Street talking about how well the economy is going.

No one is doubting that the economy is working well for Wall Street. We are not talking about that. If you are asking the Census Bureau, not a speech writer but the Census Bureau, these are their figures, and this is what has been happening to the median household income. It has declined $1,273. That is from the Bureau of the Census. That is what has happened to the median household income across this country.

We have those members of our various faiths talking about the increase in demand, the 20-percent increase in demand. Yet we are seeing these kinds of figures. We see this kind of drop in real income. Yet let's look at the cost of the things these individuals have to buy. We have the decline in the family income, but look at what has happened. Gas has gone up 36 percent; health insurance, 33 percent, which is a very modest estimate; nationwide college tuition, 35 percent; housing, 38 percent. And I would say, for the most part, these are rather modest. They come from the Kaiser Family Foundation and the College Board's Annual Survey of Colleges.

In my district, certainly in New England, those numbers are a great deal higher. But, nonetheless, it makes the point that real income has gone down and the cost of everything that a family has to buy, in terms of gasoline, health insurance for their family, college tuition, and housing has gone up. Look at the end of this chart. Wages stagnant across the way; up 1 percent. These are the figures. We haven't put the food in there, but these are strong indicators, and certainly food has gone up, although perhaps not as high as these indicators.

Let's look at the other side and see what has been happening down there on Wall Street. My goodness, look at this chart. Look what has happened to corporate profits during this same time. While real family income has been going down, these corporate profits have grown by 80 percent, 80 percent they have gone up. Eighty percent. Real income for the family has gone down over the last 5 years, but corporate profits have gone up 80 percent.

No wonder the President was cheered on Wall Street. No wonder. And look on the bottom line. That is the minimum wage. It slows, the extraordinary explosion in corporate profits. Yet the minimum wage has not gone up because our Republican friends refuse to let it go up. This is not any mystery. The Democrats are ready to vote. We are ready to vote this afternoon. We were ready to vote when it first came up, or at any time, but we can't get an agreement to vote. We are going to have to get it because the time is going to run out sometime tonight.

So these are the corporate profits that have gone up. Here is the minimum wage worker that has to work more than a day just to fill up his tank with gasoline. These are the kinds of things that they are faced with. And as we have pointed out earlier, more than a thousand Christian, Jewish, and Muslim faith leaders say that minimum wage workers deserve a prompt, clean, minimum wage increase, with no strings attached. This is Let Justice Roll, January of this year.

I have given the statistics, the flow lines, the charts, and so, Madam President, let me wind up this part of my presentation by mentioning what it means in real people's terms.

An increase in the minimum wage helps Constance Martin of Pittsburgh, PA. Constance used to have a good job that paid a decent wage. Then her son got cancer. She was forced to choose between that job and taking care of her child. So now she works for $5.50 an hour at Kentucky Fried Chicken. Her job has no health care or other health benefits. She can barely afford to pay the rent and utilities, much less to give her son the care he needs. When Pennsylvania raised its minimum wage at the State level last year, it was a help but still not enough to keep pace with the cost of living. A Federal raise would allow her to pay off her bills and provide for her son's future instead of living day to day and hand to mouth just to get by.

A raise in the minimum wage would help Tonya Schmidt. Tonya is a single mother with two children, ages 8 and 11. She works at Little Caesar's pizza. It is hard work, but she likes her job and is good at it. Tonya talked about how hard it is for her to get by each month. Her family lives in a converted motel room, but she has trouble making rent. She doesn't have a car but relies on friends and family to take her to the grocery store to buy food for her children.

Tonya can't afford the basic necessities for her children. She often cannot afford to buy her children the clothes they need to go to school. Tonya says a higher minimum wage would help her provide her kids with these basic necessities, and it might help her get a few steps ahead to buy a used car or pay for car insurance so that she could go to the grocery store on her own.

A raise in the minimum wage would help Gina Walter from Ohio. Gina, a 44-year-old single mother, works in a retail job at a thrift store. Gina earns $6.25 an hour, just over $12,000 per year. She has no car or health insurance and hasn't taken a vacation in 6 years. It takes Gina 2 full days of work just to pay her gas bill every month. She cuts her own hair because she can't afford to get a haircut. But Gina goes to work every day. She works hard and tries to build a better life for her family.

That is the typical statement: working hard, trying to provide for their family.

This bill will help Gina provide better opportunities for her 18-year-old daughter. It will help pay her gas bill and be able to go get a haircut. It might even help her finally take that vacation she so richly deserves.

Madam President, this is what we are talking about on the floor of the Senate. I will speak later about what I really think about this increase in the minimum wage in terms of it being the defining aspect of our country's humanity and a reflection of our sense of decency and our sense of fairness. But it is a scandal that we have not increased our minimum wage over a 10-year period. Hopefully we will have an opportunity to do it before the day is out.


Mr. KENNEDY. Madam President, in just a few moments the Senate will vote on the issue of increasing the minimum wage. We have been debating this issue for some time. At the final moments here, I, first of all, thank my friend and colleague from Wyoming, Senator Enzi, for his willingness to work together. We do not always agree, but we agree more often than one might expect, and we have gotten good things done in our committee.

I always enjoy working with him. We have had some differences on this issue, but we always know we have a good deal of respect for each other; I certainly for him. I know it is not appropriate to make personal comments on the floor of the Senate, but I am, in any event. It is Senator Enzi's birthday today, and we wish him the very best on this particular occasion.

Mr. ENZI. Thank you.

Mr. KENNEDY. Just finally, I think those of us who are in this Chamber understand we want to be one country with one history and one destiny. We want to make sure that for all people, in all parts of our Nation, they are going to have a part of the American dream. We, as a nation, do not want to have a subclass, a subclass of workers who cannot emerge out of a minimum wage for themselves or for their families. We recognize that work has to pay.

What we are trying to do with the increase in the minimum wage is to say to men and women of dignity--primarily to women because women are the greatest recipients of the minimum wage, to their families and their children, to men and women of color--that we understand if you work hard in the country that has the strongest economy in the world, you should not have to live in poverty. You should not have to live in poverty. And raising the minimum wage is going to help to make sure that particularly those children--those 6 million children--are going to have a more hopeful future.

Additionally, we want to send a very important message to all of those children. This is really just the beginning. We have a change in direction in this country, as we have seen in the House of Representatives and here in the Senate. And we want to give assurances to those families that hopefully are going to get some boost in the minimum wage that we are going to work on the education for those children. We are going to work to make sure they are going to get the kind of help and assistance so that education is going to be available to them. We are going to work to make sure we get a reauthorization of the SCHIP program, an expansion of the Medicaid Programs, because we want to make sure they are going to be healthy, they are going to have the opportunities for education. We are going to make sure as well, to the extent we can, they are going to be able to live in safe and secure neighborhoods.

We have a responsibility in this country of ours to make sure--particularly for children in this Nation, but for workers in this country--that their work is going to be recognized, respected, and they are going to be treated justly and fairly. That is what the minimum wage is all about. It is a moral issue, as the members of the church have all told us about. And we, hopefully, will get a resounding vote of support for a long-awaited increase in the minimum wage.

Mr. KENNEDY. Madam President, we have now spent 8 long days debating whether to raise the minimum wage by $2.10 per hour. During this time, we have had quite a bit to say about quite a variety of issues. We have talked about education. We have talked about heath care. We have talked about tax policy and immigration policy. We have actually talked very little about raising the minimum wage.

We have not had nearly enough debate about what this bill would actually do, so I can honestly say that I am pleased when my colleagues on the other side of the aisle come down the floor with the intent of actually talking about the Fair Minimum Wage Act.

Unfortunately, while I applaud them for addressing the issue at hand, their criticisms of the Fair Minimum Wage Act are woefully misplaced. My Republican colleagues are perpetuating some of the most common misconceptions about raising the minimum wage, and it is important to set the record straight.

My colleague from Tennessee, Senator Alexander, raised concerns about the private sector costs of raising the minimum wage. He argued that an increase will prove detrimental to the economy in general, or to the business community in specific. He is correct that the Congressional Budget Office has estimated that the bill will cost the private sector more than $10 billion over 5 years. However, this is a mere drop in the bucket of the national payroll. All Americans combined earn $5.4 trillion a year. A minimum wage increase to $7.25 would be less than one-fifth of 1 percent of this national payroll--far too trivial to cause inflation or other economic harm.

The simple fact is that employers can afford to increase wages in the current economy. Workers are producing more, but earning less. Productivity has increased by 31 percent since 1997, yet minimum-wage workers have not received a raise. This increase ensures that minimum-wage workers, not just employers, benefit from the fruits of their labor.

Now Senator Alexander also suggests that we shouldn't interfere with the market forces that set wages for low-wage workers. But we need to intervene when there's a market failure that needs correcting, and that's clearly the case with our stagnant minimum wage. Low-skilled workers, unlike high-skilled workers, do not generally have the bargaining power to demand wage increases. Even if they work harder, all their extra efforts are going into profits. Corporate profits have grown by 80 percent since Bush took office, while wages are stagnant. We need to act to make sure minimum wage workers don't get left behind.

My colleague also expresses concern about the effect of a minimum wage on small business. He claims that the majority of minimum wage workers are employed by small businesses, and that small businesses will suffer if the minimum wage is raised.

But the small business community doesn't agree. A recent Gallup poll found that 80 percent of small business owners do not think that the minimum wage affects their business, and three out of four small businesses said that a 10 percent increase in the minimum wage would have no effect on their company. Additionally, nearly half of small business owners think that the minimum wage should be increased, and only 16 percent of owners think the minimum wage should be reduced or eliminated entirely.

In fact, historical evidence suggests that a minimum wage increase can actually be beneficial to small business. A 2005 study by the Fiscal Policy Institute found States with minimum wages above the Federal level are generating more small businesses than states with a minimum wage at the Federal level. Between 1998 and 2003, the number of small businesses rose 5.4 percent in the ten States, including at had a minimum wage higher than the Federal level, compared to 4.2 percent in the other 40 States. The number of small retail businesses also grew faster in these States.

I appreciate Senator Alexander's concerns about the economic impacts of a minimum wage raise, those concerns are misguided. The economic doomsday scenario that Senator Alexander predicts simply will not materialize from this long-overdue increase in the minimum wage. The Senator doesn't have

to take my word for it--over 650 prominent economists, including 5 Nobel Prize winners, agree that a modest increase in the minimum wage--like the one proposed in the Fair Minimum Wage Act--``can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed.'

In addition to arguing about the economic impacts this bill, several of my colleagues have argued that raising the minimum wage is not an effective anti-poverty program, but instead will benefit primarily secondary earners and families well above the poverty line. This counterintuitive assertion is not borne out by the facts. The vast majority of minimum wage workers are hard-working Americans struggling to get by on what the minimum wage pays them for their contribution to our economy. And that is not easy.

A minimum wage increase benefits poor American families. According to the Economic Policy Institute, almost 70 percent of those who would benefit are adult workers, not teenagers seeking pocket change. Nearly half of these adults are sole breadwinners for their families. Nearly 40 percent of the benefits from a minimum wage increase would go to households with an average annual income of less than $17,000.

It is important to remember that those earning the minimum wage are not just starting out in the workforce. Many hardworking people become trapped in low-paying jobs and have trouble getting ahead. A report from the Center for Economic Policy Research shows a third of minimum wage earners from ages 25 and 54 will still be earning the minimum wage three years later. Only 40 percent of them will have moved out of the low-wage workforce 3 years later.

Certainly raising the minimum wage is only one of many steps that we should take to address the problem of poverty in this nation. Several of my Republican colleagues have suggested that we should examine ways to improve the Earned Income Tax Credit, and I look forward to working with them on this issue.

But none of this changes the fundamental fact that the Federal minimum wage is at its lowest real value in 50 years and continues to fall further and further behind each day. Minimum wage workers have been waiting longer than ever before in history for an increase, and a raise is long-overdue.

Now, my colleague from South Carolina, Senator DeMint, went so far as to suggest that raising the minimum wage will actually harm poor workers, because it will cause them to lose other government benefits. That's just not the case.

The Fair Minimum Wage Act will bring working families out of poverty. The minimum wage increase--plus food stamps and the earned income tax credit--brings a family of four with one minimum wage earner from 11 percent below the poverty line to 5 percent above the poverty line.

Now it's true that some minimum wage workers may lose a portion of their food stamp benefits, but their increased earnings and the increased benefits they receive through the earned income tax credit will more than offset any loss of benefits and provide

them with additional flexibility to meet their family's needs. They will also remain eligible for housing assistance and other essential government programs.

Minimum wage workers will also benefit from a raise in the long run. They will be earning higher wages, paying more into Social Security, and ultimately receiving more in retirement and disability benefits.

Finally, I'd like to address some comments made just this morning by my colleague from Iowa, Senator GRASSLEY. Now as Senator GRASSLEY knows, I have always taken the position that we should do this minimum wage bill ``clean'--without any add-ons or tax giveaways. Because it's just a myth that minimum wage increases hurt the business community, there is certainly no need to pay off the business community when we give minimum wage workers a raise. We've raised the minimum wage nine times since the Fair Minimum Wage act was enacted in 1938, and only once have we included a tax package for business. That was during the Clinton administration--an era when we had substantial government surpluses, not the dramatic deficits we're facing now. It's just not responsible to pass unnecessary tax giveaways in the current fiscal environment. Democrats are united in this position. While Senator GRASSLEY suggested this morning that Democrats wanted taxes added to this bill, I remind him that every Democrat in the Senate voted for cloture on the underlying bill--a clean increase in the minimum wage with no tax giveaways.

I admit that the tax package contained in the Baucus substitute is not particularly large or offensive, and I understand that it's something we'll likely have to take to get this bill done. But I don't support it, and I certainly don't support any additional tax giveaways being added to this bill.

Senator GRASSLEY suggested this morning that tax breaks are a necessary part of any increase in the minimum wage. I would remind the Senator that an overwhelming bipartisan majority in both Houses of the Iowa State Legislature just voted to increase the Iowa state minimum wage to $7.25--the same level provided in this bill--with no tax breaks included. The Senator's State leaders hold the same views as a majority of the U.S. Congress--that minimum wage workers deserve an immediate raise, with no strings attached.

I hope that these comments lay to rest the fears of my Republican colleagues. I hope that they can join me in supporting a fair increase in the minimum wage for hardworking Americans across the country.


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