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Minimum Wage Fairness Act - Motion to Proceed

Floor Speech

Location: Washington, DC


Madam President, I think people listening to the debate on the minimum wage issue may be a little bit confused, because we all want to see hard-working American families work their way toward the American dream, but we are not going to be able to do that with the Federal Government setting wages for restaurants, small businesses, and other people across the country.

I have no objection, obviously, if Massachusetts or Minnesota or some other State wants to raise the minimum wage. That is their choice. But what my colleagues are now asking for is the Federal Government, or the Nation, to set a minimum wage at a level which will destroy between 1/2 and 1 million jobs. That is not just me talking, that is the Congressional Budget Office, which is the official scorecard for the Congress.

Think about this: You are a small business and your biggest expense is wages for the people who work there. Now the Federal Government comes in and says: Forget about your local conditions in North Dakota or in Texas. We are going to say, from Washington, DC, that everybody has to raise wages by 40 percent. I can't imagine there will be many businesses, small businesses in particular, that can absorb a 40-percent increase in their overhead.

This is going to hurt low-wage earners who are currently employed. That is what the Congressional Budget Office has said. And it is going to hurt the economy.

I heard the distinguished Senator from Minnesota say the economy is doing great. Well, I guess he must have missed the latest report on the first quarter of 2014. Because of the bad weather--we had an unseasonably cold first quarter--the economy grew at .1 percent. In other words, it almost went into what would be a negative growth or a recession. Of course, recession is defined as two quarters of negative growth, but my point is this strong growth he is talking about in the economy is a figment, it is not the fact, and we need to deal with the facts on the ground.

I wonder sometimes why public opinion holds Congress and Washington in such low esteem. Actually, I don't wonder why. My conclusion is they think we are out of touch. We are out of touch with regular American families--people who are working hard to make ends meet, getting the kids ready for school and living their version of the American dream. The latest statistic I saw says that 27 percent of the American people think we are on the right track. That is a shocking number. That means 73 percent think we are on the wrong track.

What is the old saying, that the definition of insanity is doing the same thing over and over again and expecting a different outcome? Well, let's not do the same thing over and over again--keep America on the wrong track and engage in a policy decision here on this minimum wage, this 40-percent increase in the minimum wage, which will actually hurt more people than it helps.

This is not just my view. There was a poll that came out yesterday which said, basically, once people understood that people would be put out of work by increasing the minimum wage, 58 percent said it is not worth it. So 58 percent of the respondents said it is not worth it.

You know, it would be nice--it would be great--if we lived in a world where Washington could dictate what wages will be and all of a sudden peace, love, and happiness would break out--the age of Aquarius--because Washington is somehow distributing free money that didn't come from somewhere, that didn't come out of somebody's pocket or as part of someone's overhead or it didn't have any negative impact. But that is not the world we live in.

Again, this is not just public opinion, it is not just my opinion, it is not just the opinion of the Congressional Budget Office about the job-killing nature of this dramatic 40-percent increase proposed in the minimum wage. Back in 1998, President Clinton's economic adviser Gene Sperling--who just left the Obama administration--wrote a memo to President Clinton when a similar proposal was being made to raise the minimum wage 41 percent at that time. The Harkin bill we will vote on here shortly proposes to raise the minimum wage 40 percent. This was back in 1998 that Gene Sperling is writing to President Clinton on a proposed increase of the minimum wage by 41 percent, but for all practical purposes it is the same sort of proposal. This is what Mr. Sperling wrote to President Clinton:

Your entire economic team believes that this approach is too aggressive and are concerned that Senator Kennedy's proposal could prove damaging to the employment prospects of low-skilled workers .....

This was Senator Ted Kennedy's proposal back in 1998. Again, that is what the Congressional Budget Office has said about this bill.

He goes on to say, ``as well as to the general macroeconomic performance of the economy.''

So what are our friends across the aisle proposing we do when the economy grew at .1 percent this last quarter? Well, administer a body blow to this anemic economic growth. And this is not just my opinion. It is deja vu all over again, as they say. I guess if you are around Washington long enough, you are going to see this movie replayed over and over.

The fact is that our economy is weaker today than it was in 1998. Sure, unemployment is coming down slowly, but the economy is growing too slowly and the number of people in the workforce is the lowest it has been for the last 30 years, the so-called labor participation rate.

So what did President Clinton do when his economic advisers said: Don't do it, Mr. President. While it is good politics, perhaps, it really will hurt the economy, and it will put people out of work.

President Clinton, to his credit, decided not to pursue that particular 41-percent increase in the minimum wage.

I mention that as a sad contrast with the current situation where President Obama, seeing his favorability ratings at the lowest they have been since he became President, is trying to change the subject and basically make a political point when the fact is that making the political point will actually hurt a lot of hard-working Americans.

So the majority leader has decided that rather than spend the week debating legislation that would actually create jobs, we should spend it debating a proposal that would destroy jobs.

We all know that a massive minimum wage increase such as this can be a job killer. So it really wasn't surprising when we saw that quantification by the Congressional Budget Office saying this proposal could destroy up to 1 million jobs. Yet, when I was listening here, I didn't hear the distinguished Senators from Massachusetts or from Minnesota talk at all about the Congressional Budget Office report. They want to ignore that. They want us to believe that this increase in the minimum wage would have little or no effect on employment and that maybe it would have a positive effect. I heard the Senator from Massachusetts make that claim, but the people who actually run America's businesses know better.

I had dinner the other night with some folks in the restaurant business, and I will mention some examples in a moment. Most of these folks I happened to have dinner with are pretty successful, but they started out washing dishes or bussing tables or waiting on tables. They started at the bottom and worked their way up because they could find a job, get their hand on the first rung of the economic ladder and then put the other hand on the next one and work their way up to where now they are very successful businesspeople. But they understand how businesses work. They understand the negative consequences of this bad policy coming from Washington, DC.

Just ask Robert Mayfield from Austin, TX, where I live. Mr. Mayfield has been in business for 35 years now, and he is pretty successful. He also knows a thing or two about the consequences of rising labor costs. This is what we are talking about. For a business, this is the overhead. This is the labor costs they have to pay out of their income.

Mr. Mayfield wants Members of Congress to know that he strongly opposes this proposal because it will cost people jobs. Here is how he describes it:

What's most devastating about an increase in the minimum wage is that costs go up, and as a business owner, I have to raise prices--

So if we think we can pay somebody $10.10 an hour to work in a McDonalds and it won't have an impact on the cost of a Big Mac, well, we are living in a fantasy world. And that is what Mr. Mayfield says.

I have to raise prices, and sometimes the market [won't bear it]. In the end, jobs will be lost and service will suffer ..... The people in Congress wanting to pass a minimum wage bill don't know any more about how a business works than a hog knows about Sunday School. What makes it worse is Obamacare hanging over our heads. It's a job killer.

I heard this again today from a friend of mine from San Antonio. Louis Barrios, whose family has run Mexican restaurants in San Antonio for many years, talked about the combination of ObamaCare and now this proposed minimum wage increase.

He said: Right now, we would like to pay a single mom who is working in our restaurants to take orders. If Congress lifts the minimum wage to $10.10 an hour, we will have no choice but to replace that server, that waitress, with an iPad.

That is what is happening in a lot of fast food restaurants these days.

Again, Congress shouldn't operate in a vacuum without knowledge or an awareness of what the consequences might be.

I am not suggesting that any of our friends who are advocating this minimum wage increase want to put that single mom out of work, but if we embrace that policy, that is what Louis Barrios told me this morning would likely happen. And people like Robert Mayfield and Louis Barrios are supported by countless economists.

So we have folks who are actually doing the work, and then we have the big thinkers like the economists who studied this issue and concluded that this size minimum wage increase is a really bad idea in terms of the economy. More than 500 of those economists, including several Nobel Laureates, recently signed an open letter to several policymakers expressing their opposition to this 40-percent minimum wage hike. Their letter said:

Many of the businesses that pay their workers minimum wage operate on extremely tight profit margins, with any increase in the cost of labor threatening this delicate balance.

That is also what Robert Mayfield said: I can't absorb it without passing it along to customers, increasing the prices they have to pay or I may have to lay some people off or I may just have to close my business altogether.

They are operating on tight profit margins.

When so many economists and so many folks who are working across America are telling us the same thing--and the truth is that it makes perfect common sense--it would be the height of arrogance for us to ignore their concerns. But that is what President Obama and Majority Leader Reid are asking us to do today.

I made this point at the beginning. I fully share our colleagues' concerns about the stagnant wages being earned by American workers all across America. Indeed, since the Obama economic recovery--that was after the recession of 2008, but after the Obama economic recovery started kicking in in June 2009, the median household income in this country has gone down by $1,800. So I understand the concern, but I find it a little depressing that Congress's only answer is to raise the minimum wage by 40 percent, which will put people out of work and shut down small businesses, when there are a lot better ways for us to address it, and I will talk about that in a moment. Raising the minimum wage by 40 percent will not grow the economy and it will not create jobs. It will do the opposite.

Of course, the truth is--and we read this in newspapers a couple of weeks ago--we all know what is happening here, so let's talk about the 800-pound gorilla here in the Senate Chamber. The truth is that the President and Majority Leader Reid don't expect this bill to pass because they actually are very intelligent people and they know the facts as I have just described them here on the floor of the Senate. This is all about politics. This is about trying to make this side of the aisle look bad and hard-hearted to try to rescue this midterm election coming up in November. They see the President's approval rating going down, they see a number of midterm races for the Senate in play, and they have to do something. They are desperate. ObamaCare didn't work out the way they thought it would. You can't keep what you have if you like it. Your premiums didn't go down $2,500 if you are an average family of four. And, no, you can't keep your doctor in too many cases under the health insurance exchanges. So they are desperate.

We know from reporting in the New York Times and elsewhere that this minimum wage bill--this show vote we are going to have here shortly--is part of a larger messaging package created in collaboration with the Democratic Senatorial Campaign Committee. That is not me talking; that is the admission by the leadership on the other side of the aisle. This is not about actually solving the problem; this is about political theater, courtesy of Majority Leader Reid.

The real tragedy is that millions of Americans don't have any time or any patience for this sort of political theater and partisan gamesmanship because the numbers are very troubling. The Obama recovery is 5 years old. Yet 10.5 million people are still unemployed--including 3.7 million people who have been unemployed for more than 6 months--with an additional 7.4 million people working part-time because they can't find full-time work or, because of ObamaCare, their employers have taken them off full-time work and put them on part-time work in order to avoid the employer penalties.

It is true that the hard-working American family needs some help, but the truth is that this remedy being offered today--this medicine--to try to supposedly solve the problem will just make things worse. So I have a proposition to make to our friends across the aisle. If they would work with us, if they would leave these games by the wayside, and if they would focus for a minute on trying to work with us to engage in solutions that would help grow the economy and help reduce unemployment and help raise wages across the Nation, then we would gladly embrace that, and we have introduced a number of bills that would do exactly that.

I know the distinguished Senator who is presiding comes from an energy-producing State like mine, and this is no mystery to her, but in Texas, like North Dakota, there are a lot of really good jobs, but people don't have the skills necessary to qualify for those good jobs.

I was in Fredericksburg, TX, recently, where they are training welders at the community college. A welder can make $100,000 or more a year. In the Permian Basin in Midland and Odessa, TX, truckdrivers can make $100,000 a year. It is unbelievable what this renaissance in American energy has done to our economy and job creation.

One thing we could do that would be a heck of a lot more constructive than this kind of show vote and partisan gamesmanship would be to improve our workforce training programs, the Pell grant program, and try to find ways to get people the training they need in order to qualify for these good, high-paying jobs being created by this wonderful renaissance in American energy.

We could do some other things. We could try to rein in some of the regulations that I hear about day in and day out from my constituents are constraining businesses. We could approve the Keystone XL Pipeline, which makes a lot of sense and would create about 42,000 jobs. It would give us a safe source of energy from a friendly country such as Canada. We could do something else constructive. We could provide some relief for those people who have had full-time jobs turned into part-time jobs because of ObamaCare. Senator Collins from Maine and Senator Scott from South Carolina have a bill that would do exactly that.

Unfortunately, while I am an optimistic person, I am not particularly optimistic about the majority leader and the President changing their tactics in this election year. So that is why, tragically, under these circumstances we find ourselves here today debating a jobs bill that will actually kill jobs rather than one that would create jobs.

What a terrible lost opportunity that is.

I see my friend from Maryland is here ready to speak.

I ask unanimous consent that several letters that have been provided to us by organizations such as the American Hotel & Lodging Association, the Wholesale Marketers Association, among other business organizations, including the U.S. Chamber of Commerce, be printed in the Record at the conclusion of my comments. All of these letters are opposing this 40-percent minimum wage increase.

I would finally ask unanimous consent to make as part of the record a column written by a gentleman by the name of Michael Saltsman in the IndyStar newspaper entitled ``Wage hike cost is no myth.'' This is the source for the information we got about the Clinton archives and this memo that Gene Sperling wrote to President Clinton advising him that even though it might be good temporary politics, it would actually hurt a lot of low-wage workers. I ask unanimous consent that they be made part of the Record.


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