Working with Congress to Raise the Minimum Wage

September 2, 2000

Today, in his weekly radio address, President Clinton will mark the start of the Labor Day weekend by calling on Congress to make raising the minimum wage its first order of business when it returns from summer recess. The President first called for a $1 increase in the minimum wage in his State of the Union Address in January 1999. For more than a year and a half, the Republican leadership has stalled the measure; tried to weaken it by spreading the increase over three years instead of two; and burdened it with provisions that would roll back important overtime and pension protections and provide a huge tax cut for businesses. So far, delay has cost a full-time minimum-wage worker more than $900 in lost wages. With progress over the past week suggesting that a bipartisan bill benefiting 10 million American workers may be in reach, the President again calls on Congress to set aside its legislative games and work together to help working families make ends meet.

Minimum wage increase would provide real benefits for working women and families: At a time when we are experiencing the longest economic expansion in history, the proposed $1 increase before Congress would merely return the real value of the minimum wage to the level it was in 1982. This small raise would provide real benefits for more than 10 million workers, including millions of women and hard-pressed families:

Approximately 33 percent of minimum-wage workers rely on their income to support children under 18;
More than 60 percent of minimum-wage workers are women; and
16 percent of minimum-wage workers are African American and 20 percent are Hispanic.

A minimum wage increase helps hard-pressed working families make ends meet. Raising the minimum wage from $5.15 to $6.15 would raise the annual earnings of a full-time worker by about $2,000 a year. This increase would translate into enough money to pay for nearly 7 months of groceries or 5 months of rent.

Raising the minimum wage rewards work and does not cost jobs or harm the economy: Experience has demonstrated that increasing the minimum wage rewards work and allows millions of additional workers to share in the economic expansion without harming the economy or job creation. Since the last minimum wage increase was signed into law in 1996, the economy has created more than 11 million jobs, and the unemployment rate has fallen from 5.2 percent in September 1996 to 4.0 percent in July 2000. Labor market trends for workers most affected by the minimum wage increase -- including younger workers with lower educational levels and minorities -- also show no negative impact of the minimum wage on employment. In fact, recent research suggests that higher wages can increase employment, because they increase employers’ ability to attract, retain, and motivate workers.

Congress needs to drop ‘poison pills’ in minimum wage legislation: While recent developments suggest that progress is possible on the minimum wage, the President cautioned that many issues remain to be worked out. For example, Congress should not use the cover of giving raises to some workers to take away overtime pay from others. In addition, even though workers have already waited nearly two years for an increase, the Senate has so far insisted on spreading the minimum wage increase out over an additional year.

Bipartisan cooperation can produce an increase this year: It has been more than 19 months since President Clinton proposed increasing the minimum wage by $1 over two years. Republican congressional leaders first blocked the measure, then as bipartisan pressure began building, were forced to allow votes. Even though the proposal had broad bipartisan support in both Houses, Republican leaders continued to erect obstacles to its passage such as spreading the increase over three years, linking it to proposals that roll back overtime and pension protections and insisting on a huge tax cut. Meanwhile, delay has cost a full-time worker $900 in lost wages and the buying power of the minimum wage has continued to slip. This week, Speaker Dennis Hastert indicated that Republicans may be willing to drop some of these obstacles. The President is hopeful that the Administration can work with Republican leaders to complete a minimum wage increase soon after Congress reconvenes.

The minimum wage increase is a first step in completing work on America’s priorities: The President emphasized that providing relief to millions of American workers by increasing the minimum wage does not relieve Congress from completing work on a fiscally responsible budget that invests in America’s priorities or other bipartisan priorities that have been languishing in Congress for too long: These include:

A meaningful Patients’ Bill of Rights that puts the interests of patients before insurance company profits;
A Medicare prescription drug plan available to all seniors;
Common sense gun safety legislation to keep guns out of the wrong hands;
Laws to prevent hate crimes based on a victim’s sexual orientation, gender, or disability; and
Permanent normal trade relations to open China’s markets to American goods and its society to powerful forces of democratization.

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