Wednesday, September 23, 1998

Senate rejects $1 increase in minimum wage

By MARCY GORDON Associated Press

WASHINGTON - The Senate today rejected a $1 election-year increase in the federal hourly minimum wage pushed by Sen. Edward Kennedy and other Democrats.

By a 55-44 vote, senators killed the proposal, which would have raised the minimum wage earned by some 12 million Americans to $6.15 on Jan. 1, 2000. The first 50-cent increase would have taken effect next New Year's Day.

President Clinton quickly expressed disappointment with the Senate's action. In a statement issued from New York, where he had met with Japan's new prime minister, Clinton said a minimum wage boost would have "helped ensure that parents who work hard and play by the rules do not have to raise their children in poverty."

"We value working families, and that is why we should raise the value of the minimum wage," the president said. "I will continue the fight in Congress to do just that."

The House has not acted on such an increase.

Kennedy, D-Mass., had pushed to have his proposal adopted as an amendment to legislation to overhaul the personal bankruptcy laws and make it harder for people to sweep away their debts.

The strategy was similar to the one used by Democrats in 1996, when they held up action on other legislation until Republicans agreed to vote to raise the federal minimum, then $4.25 an hour, to $5.15 by September 1997.

Kennedy said a new increase was needed to help "hard-working Americans who deserve a living wage." At a time of unparalleled prosperity, people who work in factories, restaurants, hotels, retail businesses and in other modest jobs actually have seen their purchasing power eroded, he maintained.

Workers earning the minimum wage make an average $10,700 a year - $2,900 below the official poverty level for a family of three, Kennedy noted.

"Giving low-wage workers an additional 50 cents an hour can make all the difference," he said. "It can help to buy groceries or pay the rent or defray the cost of job-training courses at the local community college. The need is real. Raising the minimum wage can keep families out of soup kitchens and homeless shelters."

Opponents said an increase would hurt small businesses and cause unemployment.

It "could actually have an adverse impact upon our economy" and could cause unemployment "that hurts the low-income workers the hardest," Sen. Rod Grams, R-Minn., said before the vote.

Sen. James Jeffords, R-Vt., cited statistics showing that more than half of minimum wage workers live in families with annual incomes exceeding $25,000, and that the majority of the workers are young, single and childless.

But Democrats countered that since the last federal wage increase took effect a year ago, new jobs have blossomed.

Democrats have bolstered their arguments with a study by the labor-backed Economic Policy Institute that found no discernible job losses among entry-level workers, including teen-agers, from the latest raise.

The study found that the increase boosted wages for almost 10 million workers, of whom 71 percent were adults and 58 percent were women.