Washington, D.C. – As the Senate continues debate on the welfare reform bill opponents have adopted a strategy of offering unrelated, politically-driven amendments.
U.S. Sen. Mike Enzi, R-Wyo., spoke on the floor this week about the fallacy of one such amendment proposing a raise in the minimum wage. The text of his statement follows.
Statement of Senator Michael B. Enzi
Minimum Wage Amendment to TANF
March 30, 2004
Minimum Wage Amendment to TANF
March 30, 2004
MR. ENZI. Mr. President, I rise to share my thoughts about raising the federal minimum wage. My Colleagues on the other side of the aisle keep talking about the loss of American jobs, but their actions don't match up to their words. If my Colleagues are so concerned about unemployment, why would they do something that would eliminate jobs in this Country? If my Colleagues are so concerned about helping poor families, why would they do something that hurts poor families the most? Their effort to increase the minimum wage while attacking the President on job creation is not based on sound policy and economics.
There's an effort underway to put up a smoke screen of unrelated amendments that mask election year politics in misleading rhetoric. It's time for us to look beyond the smoke screen and see who is really helped – and hurt – by Senator Kennedy's amendment to raise the Federal minimum wage.
What every student who has ever taken an economics course knows is that if you increase the price of something – in this case a minimum wage job – you decrease the demand for those jobs. A survey of members of the American Economic Association revealed that 77 percent of the economists believe that a minimum wage hike causes job loss. For small businesses - where most of the job creation in this Country is generated - a minimum wage increase is particularly harmful. Having owned a small business in Wyoming, I can speak from personal experience about how detrimental a minimum wage increase would be for small businesses and job growth. How do I explain to my constituents, most of whom rely on small businesses for their livelihood, that Congress wants to do something that would foster job loss instead of job creation?
Everyday, I read letters to the Editor of the Casper Star Tribune to learn more about my constituents' concerns. In September, 2002, I came across a letter written by Imo Harned of Douglas, Wyoming about the effects of a minimum wage increase. For a year-and-a-half, I've held onto Mr. Harned's letter as a reminder about the true cost of a minimum wage increase. I ask consent to include this letter in the record.
I've listened carefully to my Colleagues on the other side of the aisle who support a minimum wage increase. I've seen their charts and I've heard their arguments. However, none of their charts or arguments can refute the common sense and real-world observations of Imo Harned from Douglas. Mr. Harned writes: "I have made it a habit from time to time to ask an employer if raising the minimum wage makes a difference to his business. No matter if he pays one person or dozens, the answer is always the same. ‘There are X number of dollars in the budget and I can't exceed that amount. If it means cutting hours or firing workers, I have to do it to stay within the budget.' Personal observations show that within a week of a raise in the minimum wage, groceries will raise enough to absorb the increase. Also, people who make more than minimum wage have to pay the increased costs too, so it amounts to a cut in pay for those who make more."
Mr. Harned saw through the phony economics of a minimum wage increase. He reached the same conclusion as two Stanford University Economists – a minimum wage increase is paid for by higher prices that hurt poor families the most. Some argue that we need to increase the minimum wage to help poor families. However, the 2001 study conducted by Stanford University economists found that only one in four of the poorest 20 percent of families would benefit from an increase in the minimum wage. Three in four of the poorest workers would be hurt by a wage hike because they would shoulder the costs of resulting higher prices. A Federal wage hike will hurt the very people that the underlying welfare reauthorization bill is designed to help - America's poor families.
I've held onto Mr. Harned's letter as a reminder of the dangers of a "Washington knows best" and a "one-size fits all" mentality. An increase in the Federal minimum wage is a classic lesson that Washington does not know best, and one-size does not fit all. A Federal wage mandate does not account for the cost-of-living that varies across the Country. It costs over twice as much to live in New York City than in Cheyenne, Wyoming. However, a Federal minimum wage hike that applies from coast to coast is like saying that a bag of groceries in New York City must cost the same as a bag of groceries in Cheyenne. Local labor market conditions and the cost-of-living determine pay rates, not Federal minimum wage laws dictated from Washington.
Let me say that I support an increase for all wages. But that increase should be fueled by a strong, free market economy, not by an artificial Federal mandate that hurts business and workers alike. Artificial wage hikes drive prices up. We shouldn't trick workers into thinking they are earning more when they still can't pay the bills at the end of the month. We shouldn't trick the American people into believing that the phony economics of a minimum wage increase will improve the standard of living in this Country. Nor should we trick the American people into believing that a minimum wage increase is without cost.
The smoke and mirrors of a minimum wage increase is not the way for American workers to find and keep well-paying jobs. We have to encourage – not discourage – job creation, and we have to equip our workers with the skills needed to compete in the new, global economy.
We have a bill that does this. It reauthorizes and improves the Nation's job training and employment system created under the Workforce Investment Act. This bipartisan bill passed out of the Health, Education, Labor, and Pensions Committee unanimously. We passed it on the Senate Floor by unanimous consent last November. That's as bipartisan as you can possibly get. Where is the bill now? We can't get a Conference Committee appointed to resolve differences with the House. If we really want to take care of jobs in this Country, we should appoint Conferees and enact this vital legislation.
I owe Mr. Harned and all my constituents sound policy, not election year rhetoric. I owe it to Mr. Harned and all of my constituents to remove the smoke screen around the minimum wage debate and expose its true cost. The Boxer/Kennedy amendment to raise the Federal minimum wage ignores the true cost of a minimum wage increase on America's workers and businesses.
I hope that we can put this debate – which is unrelated to the underlying bill - behind us. I hope we can move beyond election year theatrics and get to the real work of helping America's low-income families. I urge my Colleagues to oppose the Boxer/Kennedy Amendment.