Fair Minimum Wage Act of 2007
FAIR MINIMUM WAGE ACT OF 2007 -- (Senate - January 24, 2007)
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Ms. KLOBUCHAR. Mr. President, I am proud today to rise in support of the working men and women of this country. I am proud to speak for an idea whose time has long since come: Our lowest paid workers--people who drive this economy--deserve a raise. I will be proud to vote for a bill that gives them a raise, a bill that increases the minimum wage from $5.15 an hour to $7.25 an hour.
This raise is years overdue. Right now, the purchasing power of the minimum wage is at its lowest level in more than half a century, since Dwight Eisenhower was President and Bill Haley and the Comets topped the charts. The value of the current wage is 30 percent lower than it was 25 years ago.
I know a little something about earning minimum wage. I have had a number of minimum wage-type jobs--as a carhop, a highway worker, and as a pie cutter. If there are other pie cutters in the Senate, I would like to meet them. Of course, I was also a waitress to help pay for school. My career as a waitress came to an abrupt end when I spilled 12 ice teas on one customer. That is when I decided to go to law school. But I can tell you that job taught me how important it is for our leaders to look out for minimum wage workers.
Today, nearly 15 million American workers--more than 10 percent of the workforce--are counting on us to help them get a fairer wage. Almost 7 million of them would directly benefit because their hourly pay is below $7.25 an hour. Another 8 million with wages slightly above this level would also get a much needed boost.
In my State, Minnesota, more than 200,000 people are waiting for Congress to do its job.
Lifting the minimum wage is the fair thing to do. Working class families are getting left behind, even as corporations see record profits and corporate executives and the superwealthy see record salaries. If the minimum wage had increased at the same rate as the salary increases for CEOs, the rate would now be more than $23 an hour.
This is not just about kids working at fast food places, though they certainly deserve a better deal, too. Eighty percent of workers who would benefit from this bill are age 20 or older. More than half work full time. More than a third are their family's sole earners.
The bill we are debating today provides real relief to these workers and their families. Even as the purchasing power of the minimum wage has gone down, costs for working families have gone up, and they are still rising. Health care costs in our State have gone up 80 percent in the last 6 years. College tuition at the University of Minnesota has gone up 80 percent in the past 7 years. It is getting tougher to afford a house and to go to school. And gas prices are always a concern.
Wherever I go in Minnesota, I see people struggling with the brutal combination of declining real wages and increasing costs. At the lunch counters, gas stations, in the big cities, and at county fairs they talk about the need for help. This is the time for us to give them that help.
Lifting the minimum wage is also the principled thing to do. A raise means more money to these working families, and it sends a signal that we, as a community, value hard work and we insist on a fair deal for all Americans. That is a signal that the old leadership in Washington failed to send. With this bipartisan bill, we can tell our workers that we stand for the hard-working people of America.
Lifting the minimum wage is also the smart thing to do. It will decrease poverty, increase family buying power, and strengthen the consumer base in our communities. Some like to say that a minimum wage increase kills jobs. People have consistently made this argument when the minimum wage is debated. They have consistently been wrong. States that have raised their own minimum wages have not seen job losses, and many have actually outperformed the rest of the country in job creation.
A raise would not only have positive economic effects, it will also have positive social effects. As a prosecutor, I saw firsthand how crime took over communities where people could not make ends meet. When people struggled, even after working hard, they often turned to drugs or violence or both. I learned how good jobs that pay fair wages can be the best crime-fighting tool.
Lifting the minimum wage is the fair, principled, and smart thing to do across the board. But it will also have a particularly powerful effect on women. Women make up less than half of the workforce, but they make up roughly 60 percent of those who will directly gain from this raise. More than 40 percent of these working women have full-time jobs.
Three million working mothers will see a benefit from this legislation, including hundreds of thousands of single moms. Many of these women work in demanding retail and hospitality jobs--waitresses, store clerks, hotel maids--
where they are on their feet or running around all day.
Despite their hard work, they have an almost impossible time making ends meet. They struggle to afford health care or college tuition for their kids or even basics such as gas and groceries. I am in awe of these women. I am a working mother and wife, and I have worked at minimum wage, but I have never had to do both at the same time. Today, you can do something for them.
The challenges of working in the hospitality industry raise the final issue I would like to talk about today--the so-called tip credit.
Under current Federal law, tipped employees, including waitresses, bellhops, and maids, are entitled to a Federal minimum wage of only $2.13 an hour. They have to make up the difference between $2.13 and the real minimum wage with their tips.
States have always been allowed to change this rule. My State, Minnesota, similar to several others, has done that. The people of Minnesota decided that tipped workers should receive the same minimum wage as all other workers. That is now the law of Minnesota and six other States. Tipped workers earn the State minimum wage and pay taxes on both their wages and their tips.
Last year, the old Congress tried to take away Minnesota's right to enforce this law. The minimum wage bill proposed back then would have preempted State law and would have caused Minnesota's tipped wage workers' wages to immediately fall by about $4 per hour.
Thankfully, this provision didn't become law. Unfortunately, some people in Congress have talked about trying it again this year. They are seeking to pass a provision that limits Minnesota's future right to fix a fair wage for tipped workers. They think Washington knows better than the people of Minnesota what our State's wage policy should be.
I oppose these efforts. For one thing, the people of Minnesota had good reasons when they eliminated the tip penalty. They saw that tips are uncertain income, given at the discretion of the consumer. They recognize the hard work and long hours that tipped employees put in. They determined that customers give tips to reward service, not to directly pay the wages of the people who serve them. They wanted the State wage law to reflect these facts.
The people of Minnesota know about women such as Marie Hanson of Rochester. I have spoken with Marie, and her story is the best argument I can think of for making sure our tipped workers get fair wages. Marie has been a waitress at the Cahler Grand Grill in Rochester for many years. She has put two kids through school on her waitress salary, and now she is looking to save for her own retirement. If her wages are cut, or if she had been paid lower wages these past few years, her already difficult task of raising kids and making ends meet would have become impossible. For too long, Congress has favored corporations and billionaires who stash money in tax shelters in the Cayman Islands. Now it is time for Congress to pay attention to women such as Marie Hanson.
Against this backdrop, Washington should not undo the will of the people of Minnesota. States have always had the sovereign right to set their own wage policy above a Federal floor and for good reason. We all know that States understand the unique conditions and challenges they face in a way that Washington never can. And many States, including mine, have crafted their own minimum wage laws that are stronger and fairer than the current Federal law.
That is how it should be. If we take away Minnesota's right to determine wages for tipped workers, what is next? Will the people who are pushing this proposal seek to stop States from setting their own higher minimum wages? Will they subvert the will of the people in more than 25 States that have stronger laws than the Federal law?
People who would require Minnesota and like States to impose a tip penalty say they are doing it to help small businesses in these States compete against small businesses in neighboring States. But the exact same argument can be made of a Federal law forbidding all States from setting higher minimum wages. Is that the next step? I don't think so.
As somebody who visited all 87 counties in Minnesota last year, I understand very well the importance of small businesses to our communities. I wish to make sure that small businesses remain a vibrant driver of our economy. I know that the tip penalty concerns of small businesses in Minnesota, especially those in towns bordering other States, are real and they should not be ignored. But they are not best resolved here; they are best resolved much closer to home, in the State capital. Washington cannot possibly understand, let alone balance, all of the competing concerns that arise in this aspect of State wage policy. St Paul, MN, can. That is how it has always worked, and it should continue to work this way.
This is not to say that there are not small business issues common to all States that this Congress can address. I have talked with small business owners in Rochester and Duluth and Wilmer about the challenges they face, including high health care costs. I see the value of giving some relief and some incentives to small businesses trying to thrive. But Congress should not stop States from protecting tipped workers.
With all of this in mind, I urge this Chamber to fight for working families and especially the working women of this country. I urge this Chamber to pass a long-overdue minimum wage increase that doesn't deny or limit States historical right to pursue their own wage policy.
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