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Originally Processed With FOIA(s):
FOIA Number:
S; 2001-1450-F
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Speech File Draft Files
Subseries:
Chron File, 1989-1993
OA/ID Number:
13480
Folder ID Number:
13480-005
Folder Title:
Talking Points--Minimum Wage, 3/22/89
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25
6
1
7
THE WHITE HOUSE
WASHINGTON
MEMO FOR: AGENCY PUBLIC AFFAIRS HEADS
FROM: CHRISS WINSTONCa
DATE: MARCH 22
Enclosed please find a fact sheet on President Bush's
Minimum Wage proposal. Floor action is expected in the
House today and tomorrow on the minimum wage
legislation reported out of the Rules Committee
yesterday. I hope you will find this information
helpful.
FACT SHEET
PRESIDENT BUSH'S PROPOSAL ON THE MINIMUM WAGE
The President's Proposal
A 27 percent increase in the minimum wage over three
years to $4.25 for most workers.
Maintaining the current $3.35 minimum for all new
employees of a. firm on the job for less than six
months, regardless of age or previous employment.
An increase in the small business exemption to include
all firms, not just retail and service establishments,
with gross sales under $500,000, up from the current
$362,500.
An increase in the tip credit from 40 percent to 50
percent.
Fundamental Principles Guiding the President's Proposal
Provide higher earnings for long-term minimum wage
employees.
Minimize the adverse economic impact of an across-the-
board increase in the minimum wage.
Maximize job opportunities for those who need it most,
particularly young people, those with limited work
experience or skills, and members of minority groups.
Provide sensible exemptions to minimize the burden of
the minimum wage on small businesses and on service
firms where tips are an important part of compensation.
Why Not Increase the Minimum Wage to $4.65?
O
TO SAVE JOBS. An increase in the minimum wage to $4.65
would cost 650,000 job opportunities.
O
The President's Proposal would save well over 400,000
of these job opportunities.
-
The smaller increase, to $4.25, saves 200,000
job opportunities.
-
The training wage saves up to an additional
170,000 job opportunities.
-
The tip credit and small business changes
save 54,000 job opportunities.
What Other Economic Effects Would Result From a $4.65 Minimum
Wage?
O
The 40 cent increase between $4.25 and $4.65 would mean
a $0.6 billion increase in the federal deficit.
O
The 40 cent increase between $4.25 and $4.65 would
increase costs to the consumer by $6.5 billion.
o
Chairman Greenspan of the Federal Reserve has stated
that raising the minimum wage would make the battle
against inflation more difficult. A higher minimum
wage could result in higher interest rates.
0
A higher minimum wage would raise production costs,
thus reducing the competitiveness of American
manufacturers in international markets.
O
A higher minimum wage would have an additional effect
on employment costs as many fringe benefits costs are
tied to wages.
Why Have a Six Month Training Wage?
o
TO SAVE JOBS. Under the President's proposal, the six-
month training wage could save 170,000 job opportunities.
A three month training wage would save only half as many
job opportunities.
An increase in the minimum wage without an adequate training
wage provision means that many potential workers will have
much greater difficulty getting their feet on the ladder of
economic opportunity. Employers would be discouraged from
creating new jobs at a higher wage for inexperienced workers.
Those hurt the most without a training wage are the poor,
many of whom are young, and minorities.
Why Not Have the Training Wage Apply Only to a Worker's First Job
Instead of Each New Job?
O
TO SAVE JOBS. A new hire training wage, such as the
President proposed, could save four times as many job
opportunities as would a first job training wage:
170,000 VS. 40,000.
O
New jobs require new skills. Someone who may have spent
a few months on a different job may need time to learn
new skills.
Why Not Limit the Training Wage to Teenagers?
TO SAVE JOBS. Many new workers, including people trying
to escape from welfare, are in their twenties or older.
The President's universal approach is administratively
simpler and less likely to foster compliance problems.
Won't An Even Higher Minimum Wage Help Cure Poverty?
The minimum wage population and the poverty population are
composed largely of different people. 60% of those earning
the minimum wage are young people; 66% work part time, 72%
are single.
Only 336,000 heads of households living in poverty
earned the minimum wage. That is less than 2 percent of
the working-age poverty population.
The job opportunity losses from a universal $4.65
minimum wage may actually increase poverty by denying
jobs to members of families living in poverty. Poor
families would also be forced to pay the higher consumer
and other costs associated with a higher minimum wage.
Won't A Higher Minimum Wage Increase Job Opportunities and Wages?
Since 1982, with no increase in the minimum wage, the
economy has added more than 19 million jobs. Yet, the
number of minimum wage jobs has declined by 2.6 million
or 40 percent.
In the last 7 years, 18.4 million jobs (an increase of
80 percent) paying more than $10.00 per hour have been
added. Five million jobs paying between $5.00 and
$10.00 have been added. The number of jobs paying less
than $5.00 per hour has declined by 30 percent.
With a constant minimum wage the unemployment rate has
been reduced to 5.1 percent, the lowest in 15 years.
A higher minimum wage hurts small business the most.
These firms are the key to future employment growth and
opportunity for the economy.
# # #
TALKING POINTS -- SAVINGS AND LOAN PLAN
"Our solution must ensure the least possible disruption to
local markets -- and at the same time keep costs to a minimum
I sent the Congress a bill that will enable us to take action to
halt the dollar drain, and move forward on stabilizing our S & L
system. It's a sound a comprehensive plan -- and it has been
well received. I want to see that bill passed with its central
provisions intact. There's no excuse for further delay."
-- President Bush, Forum Club of Houston, March 16, 1989
The President has taken quick and decisive action on the
Savings and Loan crisis, and announcing a comprehensive set of
proposals less than three weeks after taking office. He has
guaranteed that insured depositors are not at risk, and will
continued to be protected by the U.S. government.
AN OVERVIEW OF THE S & L CRISIS:
For more than a half century, the United States has operated
a deposit insurance program that provides direct government
protection to the savings of our citizens. This program has
enabled tens of millions of Americans to save with
confidence. In all the time since creation of deposit
insurance, savers have not lost one dollar of insured
deposits. The President is determined that they never will.
Deposit insurance has always been intended to be
self-funded. This means that the banks, savings and loans
and credit unions that are insured pay a small portion of
their assets each year into a fund that is used to protect
depositors. In every case these funds are spent to protect
the depositors, not the institutions that fail.
Financial difficulties have led to a continuous erosion of
the strength of the Federal Savings and Loan Insurance
Corporation ("FSLIC"). Because of the accumulation of
losses at hundreds of thrift institutions, additional
resources must be devoted to cleaning up this problem. We
intend to restore our entire deposit insurance system to
complete health.
While the issues are complex, and the difficulties manifold,
we will make the hard choices, not run from them. We will
see that the guarantee to depositors is forever honored, and
we will see to it that the system is reformed
comprehensively so that this situation is not repeated ever
again.
THE FOUR MAJOR POINTS OF THE ADMINISTRATION'S PLAN:
First, currently insolvent savings institutions will be
placed under the joint management of the FDIC and FSLIC
pursuant to existing law. This will enable us to
control future risk-taking, and to begin reducing
ongoing losses.
Second, the regulatory mechanism will be substantially
overhauled to enable it to more effectively limit
risk-taking.
-- The FDIC would become the insurance agency for
both banks and thrifts under this system. The
insurer will have the authority to set minimum
standards for capital and accounting.
-- Uniform disclosure standards would also be
implemented.
-- The chartering agency for thrifts would come
under the general oversight of the Secretary of
the Treasury.
Third, we will create a financing corporation to issue $50
billion in bonds to finance the cost of resolving failed
institutions, which will supplement approximately $40
billion that has already been spent.
-- All of the principal of these bonds, and a portion
of the interest on them, will be paid from
industry sources.
-- However, the balance would be paid from on-budget
outlays of general revenues. Hopefully some of
these revenues will be recovered in the future
through sales of assets and recovery of funds from
wrongdoers.
Fourth, we plan to increase the budget of the Justice
Department by approximately $50 million per year to enable
it to create a nationwide program to seek out and punish
those that have committed wrongdoing in the management of
the failed institutions.
THE PRINCIPLES GUIDING THE PRESIDENT'S DECISION:
The President does not support any new fee on depositors.
We should preserve the overall federal budget structure, and
not allow the misdeeds and wrongdoing of savings and loan
executives and the inadequacy of their regulation to
significantly alter our overall budget priorities.
This proposal, once enacted by the Congress, will
will enable our system to prevent any repetition of this
situation.
This plan attacks the problem head-on, with every available
resource of this government. Because it is a national
problem, the combined resources of our federal agencies will
be brought together in a team effort to resolve the problem.
Banks and thrifts should pay the real cost of providing the
deposit insurance protection. The price the FDIC charges
banks for their insurance has not been increased since 1935.
We propose to increase the bank insurance premium by less
than seven cents per $100 of insurance protection they
receive. Every penny collected would be used to strengthen
the FDIC so that the taxpayers will not be called on to
rescue it a few years from now.
IN CONCLUSION:
O
The United States Government has stood behind the safety of
insured deposits before, it does today, and it will do so at
all times in the future. Every insured deposit will be
backed by the full faith and credit of the United States of
America, which means that it will absolutely be protected.
For the future, we will seek to achieve a safe, sound and
profitable banking system. However, integrity and prudence
must share an equal position with competition in our
financial markets. Clean markets are an absolute
prerequisite to a free economy, and to the public confidence
that is its most important ingredient.
The President has called on Congress to join him in a
determined effort to resolve this threat to the American
financial system permanently, and to enact his legislative
proposals without delay.
# # #
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
March 21, 1989
FACT SHEET
PRESIDENT BUSH'S PROPOSAL ON THE MINIMUM WAGE
The President's Proposal
A 27 percent increase in the minimum wage over three
years to $4.25 for most workers.
O
Maintaining the current $3.35 minimum for all new
employees of a firm on the job for less than six
months, regardless of age or previous employment.
An increase in the small business exemption to include
all firms, not just retail and service establishments,
with gross sales under $500,000, up from the current
$362,500.
o
An increase in the tip credit from 40 percent to 50
percent.
Fundamental Principles Guiding the President's Proposal
O
Provide higher earnings for long-term minimum wage
employees.
Minimize the adverse economic impact of an across-the-
board increase in the minimum wage.
Maximize job opportunities for those who need it most,
particularly young people, those with limited work
experience or skills, and members of minority groups.
Provide sensible exemptions to minimize the burden of
the minimum wage on small businesses and on service
firms where tips are an important part of compensation.
more
2
Why Not Increase the Minimum Wage to $4.65?
O
TO SAVE JOBS. An increase in the minimum wage to $4.65
would cost 650,000 job opportunities.
The President's Proposal would save well over 400,000
of these job opportunities.
-
The smaller increase, to $4.25, saves 200,000
job opportunities.
-
The training wage saves up to an additional
170,000 job opportunities.
-
The tip credit and small business changes
save 54,000 job opportunities.
What Other Economic Effects Would Result From a $4.65 Minimum
Wage?
O
The 40 cent increase between $4.25 and $4.65 would mean
a $0.6 billion increase in the federal deficit.
O
The 40 cent increase between $4.25 and $4.65 would
increase costs to the consumer by $6.5 billion.
O
Chairman Greenspan of the Federal Reserve has stated
that raising the minimum wage would make the battle
against inflation more difficult. A higher minimum
wage could result in higher interest rates.
0
A higher minimum wage would raise production costs,
thus reducing the competitiveness of American
manufacturers in international markets.
O
A higher minimum wage would have an additional effect
on employment costs as many fringe benefits costs are
tied to wages.
more
3
Why Have a Six Month Training Wage?
TO SAVE JOBS. Under the President's proposal, the six-
month training wage could save 170,000 job opportunities.
A three month training wage would save only half as many
job opportunities.
An increase in the minimum wage without an adequate training
wage provision means that many potential workers will have
much greater difficulty getting their feet on the ladder of
economic opportunity. Employers would be discouraged from
creating new jobs at a higher wage for inexperienced workers.
Those hurt the most without a training wage are the poor,
many of whom are young, and minorities.
Why Not Have the Training Wage Apply Only to a Worker's First Job
Instead of Each New Job?
TO SAVE JOBS. A new hire training wage, such as the
President proposed, could save four times as many job
opportunities as would a first job training wage:
170,000 VS. 40,000.
New jobs require new skills. Someone who may have spent
a few months on a different job may need time to learn
new skills.
Why Not Limit the Training Wage to Teenagers?
TO SAVE JOBS. Many new workers, including people trying
to escape from welfare, are in their twenties or older.
The President's universal approach is administratively
simpler and less likely to foster compliance problems.
more
Won't An Even Higher Minimum Wage Help Cure Poverty?
The minimum wage population and the poverty population are
composed largely of different people. 60% of those earning
the minimum wage are young people; 66% work part time, 72%
are single.
Only 336,000 heads of households living in poverty
earned the minimum wage. That is less than 2 percent of
the working-age poverty population.
The job opportunity losses from a universal $4.65
minimum wage may actually increase poverty by denying
jobs to members of families living in poverty. Poor
families would also be forced to pay the higher consumer
and other costs associated with a higher minimum wage.
Won't A Higher Minimum Wage Increase Job Opportunities and Wages?
O
Since 1982, with no increase in the minimum wage, the
economy has added more than 19 million jobs. Yet, the
number of minimum wage jobs has declined by 2.6 million
or 40 percent.
In the last 7 years, 18.4 million jobs (an increase of
80 percent) paying more than $10.00 per hour have been
added. Five million jobs paying between $5.00 and
$10.00 have been added. The number of jobs paying less
than $5.00 per hour has declined by 30 percent.
With a constant minimum wage the unemployment rate has
been reduced to 5.1 percent, the lowest in 15 years.
O
A higher minimum wage hurts small business the most.
These firms are the key to future employment growth and
opportunity for the economy.
# # #
March 6, 1989
TALKING POINTS
EASTERN AIRLINES STRIKE
No justifiable reason exists to support the creation of an
Emergency Board at this time.
Labor and management must work together to resolve their
disputes. Eastern and the Machinists, without anyone else,
should be allowed to resolve collective bargaining disputes
in an orderly fashion without unwarranted government
intervention or the use of secondary boycotts.
The strike by Eastern's machinists, and even its pilots and
flight attendants, will not seriously disrupt interstate
commerce to a degree such as to deprive any section of the
country of essential transportation service. Eastern
carries 6 percent of air traffic in the United States.
Eastern's competitors should be able to accommodate most
displaced passengers. There will be passenger
inconvenience, but that does not justify an Emergency
Board.
An Emergency Board would only delay the resolution of this
bitter eighteen-month-old dispute. The differences between
the parties are vast. We have no reason to believe that
the 60-day period provided by the empaneling of an
Emergency Board would bring the parties any closer
together. Instead, 60 more days of suspense could well
drive the parties farther apart.
Secondary boycotts should not be permitted to extend this dispute to
unrelated businesses.
The Machinists should not be allowed to deprive the
American people of essential transportation services by
spreading the Eastern dispute to other airlines and the
railroads through secondary boycotts.
Airline and railroad labor unions are able to spread
strikes through the use of secondary boycotts only because
of an unfortunate legal anamoly. Secondary boycotts are
peculiar to these two industries. They have been outlawed
in other industries because they unfairly permit the
concerns of a handful of employees to hold hostage large
segments of American commerce.
This President cannot, and will not, condone the use of
secondary boycotts in response to the Eastern situation.
If necessary, he will submit to the Congress legislation to
ensure that the American people are never again injured by
secondary boycotts. The onus will then be on the Congress
to prevent this disruption from occurring.
-2-
The Federal Aviation Administration is fully carrying out its
responsibilities with regard to the strike at Eastern.
Assuming that Eastern continues to fly, FAA's role will
be to ensure continued safe operations. The FAA is
prepared to monitor Eastern's operations closely (and
the operations of other airlines that may be affected
by the strike) for safety, airworthiness, and
compliance with applicable Federal air safety
regulations.
The FAA has increased the number of inspections and has
examined Eastern's contingency plans. FAA is poised to
investigate any allegations of unsafe conditions
resulting from Eastern's own practices or disruptions
caused by the strike and will take immediate action, if
necessary, to ensure that the health and safety of
Eastern's passengers are not threatened.
FAA has told Eastern that newly hired personnel must
meet the same job qualifications and undergo the same
training as those hired before the strike. The agency
will not waive any requirements or approve any
shortcuts.
FAA has assigned inspectors to monitor any independent
repair stations under contract to Eastern to ensure
that the quality of work meets all agency standards.
FINAL
March 27, 1989
TALKING POINTS ON ANTI-DRUG ABUSE EFFORTS
The President is committed to ending illegal drug use in
America. He has met with students, parents, community
leaders and law enforcement officials involved in the fight
against drugs --and has urged a united effort in countering
drug use and its related devastation.
The President is working shoulder-to-shoulder with America's
first Director of National Drug Control Policy, Bill
Bennett.
The policy of this Administration is "zero tolerance." No
amount of illegal drug use is acceptable. This means
dealing with both supply and demand.
In his February 9 address to the joint session of Congress,
the President requested $6 billion in FY 1990 to fight
drugs, increasing outlays by nearly $1 billion for drug
education, treatment and enforcement. This is a 21 percent
increase over 1989, and 47 percent over 1988.
The Administration has launched a four-pronged attack in
fighting the flow of drugs: education, rehabilitation,
interdiction and enforcement.
Education:
We must establish "zero tolerance" as an attitude and a
way of life by educating our children at home and at
school on the dangers of experimenting with drugs.
All schools should develop anti-drug programs for the
classroom, and adopt tough "no use" disciplinary
policies to show that drug use will not be tolerated.
The Administration is requesting nearly $1.1 billion
for education adn prevention efforts. This is a 16
percent increase over 1989, and includes funding for
ongoing programs and new initiatives.
Rehabilitation:
Those who fail to heed the signals and do use drugs
should be encouraged to seek treatment -- the aim is to
reclaim lives, not abandon them. The President's
policy balances firmness with compassion.
Funding for drug abuse treatment will be increased 18
percent, including new grants to reduce the waiting
periods for admittance into drug treatment programs.
The Administration is proposing over $700 million to
expand the nation's capacity to provide drug abuse
treatment, particularly for the indigent,
disadvantaged, youth, and expectant mothers.
Interdiction and Enforcement:
Eradicating drugs at the source, interdicting them
before they cross our borders, and destroying the
trafficking cartels that profit so richly from drug
addiction are important steps in fighting this
insidious foe.
The Administration is proposing over $4.1 billion for
law enforcement programs in 1990, a 10 percent increase
over 1989. This constitutes about 70 percent of
President Bush's proposed drug budget.
Substantial funding increases are requested for the
Drug Enforcement Administration, the Customs Service,
the State Department's Bureau of International
Narcotics Matters, and the U.S. Coast Guard drug
interdiction program -- to strengthen inspection,
interdiction, intelligence efforts and crop eradication
programs.
The Justice Department will receive funding for grants
to local law enforcement agencies and for additional
U.S. Attorney prosecutorial staff, as well as for FBI
investigations and local law enforcement training. The
Department of Justice anticipates distribution of $175
million to state and local law enforcement agencies out
of the asset forfeit fund.
Policies are aimed at stepping up the pressure on the
suppliers of illegal drugs by providing grants to State
and local law enforcement, beefing up the Federal
enforcement agencies, and enhancing our drug
prosecution, detention and intelligence capabilities.
The President supports strict application of the tough
new penalties of the Anti-Drug Abuse Act of 1988, which
calls for the death penalty for those who commit drug-
related murders and for increased prison sentences for
other drug-related crimes.
The President will appoint judges who will strongly
enforce the drug penalty laws. He encourages the
judiciary to strictly apply the law to convicted drug
offenders, and particularly supports severe sentences
for dealers who hire children to carry or sell their
drugs, and those who sell near schools.
RECENT ACTIONS:
On March 14, the Administration ordered a temporary ban on
the import of certain semi-automatic weapons. The President
said, "A secure community is the right of every American.
Toward that end guns can be imported under current law, only
if they are adaptable for sporting purposes. We've recently
taken a step and temporarily suspended the import of AKS-47
type and certain other semi-automatic weapons into this
country as we continue to search for a solution to this
difficult and complex problem."
Attorney General Thornburgh traveled in early March to South
America, where he met with the top officials of Columbia,
Bolivia and Peru. The topic of their discussions was
curbing drug production as well as the destruction of the
trafficking cartels. The Attorney General reported that the
leaders share our commitment to enhance cooperative efforts
at all levels. The President is committed to removing
obstacles that inhibit certain Latin American nations from
substituting profitable, legitimate crops for coca.
###