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Miscellaneous Worker/Labor Issues: Executive Order on Minimum Wage
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THE WHITE HOUSE
WASHINGTON
Mene Orzag - Kreelye's guy
Bowles Chances are de minimis
Eacu before AK wrote his memo
SEP-02-1995 00:20
P.02
September 1, 1995
MEMORANDUM FOR LEON PANETTA, ERSKINE BOWLES, AND HAROLD ICKES
FROM:
Alan Krueger Alan Kuser
SUBJECT:
Minimum Wage Executive Order
In spite of my research on the employment effects of a general minimum wage hike, I
would strongly oppose an executive order requiring a higher minimum wage for federal
contractors. I thought you might be interested in the following objections I have to such an
executive order.
0 There is NO evidence supporting an economic argument that a higher minimum wage for
contractors will enhance the efficiency of government contracting. If paying a higher wage
would increase productivity by more than the cost of paying higher wages, employers would
take such action on their own.
0 I doubt any mainstream economist will support the President on an executive order raising
the minimum wage for federal contractors on efficiency grounds.
0 Employers often react to a higher minimum wage by raising prices. I would predict that an
executive order requiring a higher minimum wage for contractors would result in higher costs
for the government. Indeed, most of the extra labor costs would probably be passed on to the
government in the form of more expensive contracts. Given that the government will be
paying for the minimum wage hike, there are probably more effective ways for the
government to transfer income to the working poor.
o The President's proposal to raise the minimum wage has won a good deal of support in the
mainstream press. The press and public have largely viewed any efficiency loss of a
minimum wage hike to be outweighed by distributional gains. However, this support will be
severely jeopardized -- and may turn to strong opposition -- if the President argues that
raising the minimum wage will improve efficiency. The President's credibility will be
jeopardized.
o I doubt the politics of the executive order will help the President. The President is winning
support of the public on the proposal for a general minimum wage hike. An executive order
at this time will make it seem that the President has abandoned the general minimum wage
hike because he couldn't win over Congress, and will appear blatantly political. Moreover,
the loss of credibility from making unsupported efficiency arguments for the executive order
will side track the valid arguments and support for a general minimum wage hike.
TOTAL P.02
Politics
Our current approach is working well. Polls suggest 80 percent of the public favors the
proposed increase in the minimum wage. The President's proposal is putting the heat
on Congressional Republicans and helping our Congressional allies.
It is very likely that the proposed Executive Order could backfire. The media would
portray it as a sign that the President is backing off his commitment to an across-the-
board minimum wage due to insufficient support in Congress.
Many outside validators are unlikely to embrace this action (including Katz and Krueger).
The resulting increase in the cost of government services would have an unfortunate
resonance with the big government theme.
We would get more mileage out of direct action that targets enforcement. This issue has
a lot of support among the public, and enjoys support even among those who oppose
increases in the minimum wage.
Striker replacement is popular with union leadership but has very little resonance with
the broader public.
Legality
Legally, we would need to be able to show that such a requirement would improve the
efficiency of government procurement. There is no evidence to this effect.
Economics
To the extent that such a requirement were enforced on all the activities of government
contractors, a basic demand curve story would imply a reallocation of low-skilled
workers from contracting firms to purely private sector firms. In those industries where
substitution for low-skilled workers is difficult (such as fast food), contractors would be
priced out of the private sector market.
However, firms would most likely find ways to avoid applying the higher
minimum wage to their non-government related activities.
The proposed partial minimum wage hike would effectively transfer income by raising
the cost of government services.
Although the best rationale for an across-the-board minimum wage hike is a
transfer of income to the working poor, it would take place primarily through the
private sector.
A more efficient means of accomplishing such a transfer within the public sector
would be to simply increase funding for the EITC.
THE WHITE HOUSE
WASHINGTON
August 30, 1995
MEMORANDUM FOR ERSKINE BOWLES
AB MIKVA
LAURA TYSON
CAROL RASCO
ALICE RIVLIN
JACK QUINN
DOUG SOSNIK
PAT GRIFFIN
ALEXIS HERMAN
KITTY HIGGINS
TODD STERN
JACK LEW
STEVE KELMAN
MIKE SCHMIDT
DOROTHY ROBYN
233
ELGIE HOLSTEIN
KAREN HANCOX
SUSAN BROPHY
KATE CARR
STEVE SILVERMAN
FROM:
JENNIFER O'CONNOR and
SUBJECT:
Minimum Wage Executive Order
Attached is a draft Executive Order, prepared by the Department of Labor, which would
require federal contractors to pay the President's proposed new minimum wage of $5.15 per
hour. The package includes a description of the pros and cons, as well as backup material.
Please have the appropriate person on your staff review the draft Executive Order and contact
me with comments by 5:00pm today (Wednesday, August 30). Comments can be faxed to
me at 456-7929, e-mailed to me, or called in to me at 456-6350. My apologies for the rapid
turn-around, but there is discussion of moving this very quickly.
MEMORANDUM
DATE:
AUGUST 29, 1995
SUBJECT:
MINIMUM WAGE EXECUTIVE ORDERS
Summary
As requested, we have prepared a draft executive order that would prohibit
government agencies from doing business with federal contractors that pay below $5.15 per
hour.
Attached to this memorandum are: (1) the draft executive order relating to federal
contractors and the minimum wage; (2) the press packet released by the White House on
February 3, 1995 accompanying your legislative proposal to increase the minimum wage;
(3) an excerpt on the minimum wage from your May 19, 1995 speech for the 75th
Anniversary celebration of the Labor Department's Women's Bureau; and (4) a legislative
background brief describing how members of Congress voted when the minimum wage was
last increased in 1989.
Message
*
The nation's leading economic problems are stagnant wages and declining real
incomes for working families.
*
The federal government should not contribute to the wage and income problems
facing working families.
*
The President has presented Congress with a legislative proposal to increase the
minimum wage 90 cents from its current $4.25 per hour. This initiative would assure that
people who work hard and play by the rules receive a living wage of $5.15 per hour.
Congress has refused to act.
* If Congress won't act, President Clinton will. The President will use his executive
authority to guarantee a living wage --- $5.15 per hour --- for everyone working in firms that
do business with the federal government.
* At a minimum, the federal government should not do business with corporations
that pay workers less than a living wage.
1
Discussion
I.
Increasing the Minimum Wage for Employees of Federal Contractors
A. How the Executive Order Would Work
This draft executive order would establish that "[i]t is the policy of the executive
branch in procuring goods and services that
federal agencies shall contract with
companies that pay their employees no less than $5.15 an hour." This policy would be
enforced in two ways. First, every government contract entered into after the effective date
of the executive order (the date you sign it) would include a clause in which the contractor
agrees to pay a minimum wage of $5.15 per hour. Second, any contractor that pays below
$5.15 could have all of its government contracts terminated. The executive order does not
provide for any exceptions.
The Secretary of Labor would enforce and administer the order. If the Secretary
finds that a contractor is not paying a minimum wage of $5.15, he would transmit a finding
to the heads of contracting agencies or departments who, in turn, must terminate all contracts
with the contractor unless the contractor pays all of its employees at least $5.15 per hour
within a time specified by the Secretary.
Like the "striker replacement" executive order, this draft order is premised on the
authority delegated to the President by Congress in the Federal Property and Administrative
Services Act of 1949 "to provide for the Government an economical and efficient system for
procurement and supply." Some economic theories suggest that increasing the wages of
low-wage workers will result in an increase in those workers' productivity and, in turn, to
increases in efficiency that will offset the cost to federal contractors of the higher wages.
Thus, the federal government would, according to these theories, procure its goods and
services from more efficient, more economical federal contractors.
B. Possible Variations in this Executive Order
(1) Use CEO Pay as a Trigger: The executive order could be made to apply only to
federal contractors that pay their chief executive officer (or other top executive) more than
100 times the lowest wage paid to their employees. This approach would dramatize the
growing wage disparity in our economy. On the other hand, it undermines the central moral
argument which supports raising the minimum wage: every worker is entitled to a living
wage, regardless of who employs them or how much others in their organization earn.
Further, using a CEO pay trigger may weaken the nexus to economical and efficient
procurement, the legal prerequisite for presidential action of this type.
(2) Use Profits as a Trigger: The executive order could also be made to apply only to
federal contractors that earn above average profits. This approach would juxtapose the huge
economic returns being yielded by capital (e.g., the soaring stock market) with the decline in
2
middle and working class family incomes. On the other hand, it suffers from both of the
infirmities outlined above (i.e., undermining the moral argument and attenuating the
procurement nexus), plus it would require an administrative apparatus to decipher each
contractors' profits.
C. Arguments For and Against the Executive Order
(1) Pro: This draft executive order will demonstrate your commitment to increasing
working families' wages (particularly for the lowest wage workers) and distinguish you from
a congressional majority that refuses to even consider your legislative proposal to increase the
minimum wage. The minimum wage has fallen 27% in real terms since 1979 and, without
adjustment, will fall to its lowest real value in forty years in 1996. It is arguable that the
growing disparity in family incomes and wealth is the most pressing issue for middle and
working class families. This executive order would make your moral position clear you
will not allow the federal government to do business with any company that contributes to
declining real wages for low-wage workers.
(2) Con: This executive order is premised entirely on economic theory, much of
which will be difficult to explain in simple terms to the public, that is outside the mainstream
of scholarly economic thought; accordingly, it is unclear whether reliable third parties will
validate the arguments set forth in the preamble. Further, it is unclear whether theory alone
is adequate to support an executive order. Even accepting the theories as true, it is also
unclear whether the nexus between a minimum wage increase and efficient and economical
procurement is sufficiently close to pass judicial scrutiny.
Preliminary research has not disclosed any executive order, outside the context of
President Roosevelt's extraordinary powers during World War II, that directly sets wages for
employees of federal contractors; that is, this executive order could be unprecedented. The
closest analogy may be President Carter's Executive Order No. 12092 which required federal
contractors to certify that they were in compliance with voluntary wage and price guidelines
established by the President's Council on Wage and Price Stability. Finally, this executive
order could lend support to attacks that President Clinton and the Democrats want big
government. A slippery slope argument is easily made: "If Bill Clinton can require federal
contractors to pay a higher minimum wage, is he going to require a pay increase for all
workers? Will he require all federal contractors to follow his health plan? To finance
abortions through their health plans?"
(3) Likely Constituency Responses: The labor movement and other advocates for low-
wage workers will likely support the executive order. Federal contractor groups and
representatives of the business community (e.g., the Chamber of Commerce, the National
Association of Manufacturers), as well as the Republican congressional majority, will oppose
the executive order. Since a substantially larger group of federal contractors will be affected,
it is reasonable to expect a much more vigorous negative response from the business
community than the striker replacement executive order evoked. Litigation and congressional
3
action (e.g., efforts to overturn the executive order, appropriations riders blocking
enforcement of the order) will likely result.
D. The EO's Costs Are Difficult to Estimate
A very rough estimate of the costs of the executive order suggests that it will cost
federal contractors not more than $2.1 billion per year. Please note, however, that the data
needed to make a precise estimate of the cost of the minimum wage executive order are not
available. Estimates of worker wages and the number of workers involved do, however,
permit this crude projection.
The assumptions employed to reach the above estimate likely bias the estimate
upward. First, many federal contractors (e.g., construction, service) are required to pay a
prevailing wage above the minimum wage by the Davis-Bacon Act and the Service Contract
Act. Second, federal contractors' firms tend to be larger and, as a result, may have a
smaller percentage of minimum wage workers than firms in the economy as a whole.
Accordingly, the total number of workers affected by the executive order is probably smaller
than that assumed in the calculations to reach the above estimate. Certain structural changes
to the executive order (e.g., adding a threshold, narrowing the definition of "federal
contractor") would further reduce the number of workers covered and the commensurate
costs.
On the other hand, this estimate does not take into account any "ripple" effect that
minimum wage increase might have on the wages of workers that currently earn $5.15 or
slightly more. The ripple effect would tend to increase the costs of the executive order to
federal contractors.
II.
Two Approaches to Announcing the Executive Order
Should you decide to proceed, you should consider two approaches to announcing the
executive order.
You could announce the executive orders in a speech --- such as your forthcoming
address to the Alameda Central Labor Council's Labor Day Picnic or radio address and
then sign the order soon before, the same day, or soon thereafter. This approach gives the
White House control over timing and press arrangements. It also provides an opportunity to
brief potential supporters without tipping off opponents. On the other hand, it could inspire
congressional retaliation in the appropriations/reconciliation/debt ceiling process.
Or, you could announce in a speech or radio address that you are giving Congress a
90-day (or until Christmas or New Year's Eve) deadline before which it must enact your
proposed 90-cent increase in the statutory minimum wage. If it does not act by the time the
deadline is reached, you would issue the executive order. This approach puts the onus
4
squarely on Congress' shoulders. It also allows you to wield all of your available authority
to keep the minimum wage from falling to its lowest real value in 40 years (which it will in
1996 if there is no adjustment). On the other hand, this approach allows opponents time to
organize and, possibly, to seek judicial intervention. It also offers words when bold action
might send a stronger and clearer message.
Attachments
5
DRAFT 4
August 25, 1995
ENSURING THE ECONOMICAL AND EFFICIENT ADMINISTRATION AND
COMPLETION OF FEDERAL GOVERNMENT CONTRACTS
PREAMBLE
Some economic theories suggest that requiring federal
contractors to pay a higher minimum wage will lead to increases
in efficiency that will offset the cost to federal contractors of
the higher wage. The minimum wage has fallen 27% in real terms
since 1979 and, without adjustment, will fall to its lowest real
value in forty years at the end of 1996. Meanwhile, labor
productivity has increased 17% since 1979.
These theories suggest that the productivity of low-wage
workers is depressed when the minimum wage falls significantly in
real terms. These conditions can lead to greater levels of
"shirking" (i.e., reduced efforts by workers), higher turnover,
lower morale, and longer periods in which needed jobs remain
unfilled. Raising the minimum wage may lead to efficiency gains
among federal contractors that employ low-wage workers by
reducing shirking, lowering turnover, increasing morale, and
reducing the periods of time during which needed jobs remain
unfilled. In sum, productivity is lower when workers are paid an
obsolete minimum wage and, as a result, the federal government
receives lower quality, less reliable, and less timely goods for
each taxpayer dollar. By paying a higher wage to low-wage
workers, federal contractors will increase worker productivity.
The federal government will procure its goods and services from
more efficient, more economical federal contractors.
The market may not address this problem on its own. The
problems of turnover, shirking, low morale, and extended job-slot
vacancies likely result from a minimum wage which is too low to
attract new workers and retain incumbent workers. However,
employers cannot lure a new worker into a particular job with a
higher wage without giving everyone else in that job a pay
increase. Thus, in the absence of a requirement that they pay a
higher wage, employers choose lower levels of employment and
output rather than increasing the wages paid to all of their low-
wage workers.
NOW, THEREFORE, to ensure the economical and efficient
administration and completion of Federal Government contracts,
and by the authority invested in me as President by the
Constitution and the laws of the United States of America,
including 40 U.S.C. 471 and 486 (a) and 3 U.S.C. 301, it is hereby
ordered as follows:
Section 1: It is the policy of the executive branch in procuring
goods and services that, to ensure the economical and efficient
administration and completion of Federal Government contracts,
Federal agencies shall contract only with companies that pay
their employees no less than $5.15 per hour of work. All
Government contracting agencies shall include in every Government
contract hereafter entered into the following provision:
"During the course of the contract the contractor agrees
that all employees of the contractor will be paid no less
than $5.15 an hour.
Sec. 2. (a) The Secretary of Labor ("Secretary") may investigate
any Federal contractor to determine whether the contractor is
paying any of its employees less than $5.15 per hour of work.
(b) The Secretary shall receive and may investigate
complaints that the contractor is paying any employee less than
$5.15 per hour of work.
(c) The Secretary may hold such hearings, public or
private, as he or she deems advisable, to determine whether any
contractor is paying any employee less than $5.15 per hour of
work.
Sec. 3. (a) When the Secretary determines that a contractor has
paid any employee less than $5.15 per hour of work, the Secretary
may make a finding that it is appropriate to terminate the
contract for convenience. The Secretary shall transmit the
finding to the head of any department or agency that contracts
with the contractor. All Government contracts with the
contractor shall be immediately terminated unless the contractor
commences within a time specified by the Secretary to pay all of
its employees no less than $5.15 per hour of work.
(b) Each contracting agency shall cooperate with he
Secretary and provide such information and assistance as the
Secretary may require in the performance of the Secretary's
functions under this order.
Sec. 4. (a) The Secretary shall be responsible for the
administration and enforcement of this order. The Secretary may
adopt such rules and regulations and issue such orders as may be
deemed necessary and appropriate to achieve the purposes of this
order.
(b) The Secretary may delegate any function or duty of the
Secretary under this order to any officer in the Department of
Labor or to any other officer in the executive branch of the
Government, with the consent of the head of the department or
agency in which that officer serves.
Sec. 5. This order is not intended, and should not be construed,
to create any right or benefit, substantive or procedural,
enforceable at law by a party against the United States, its
agencies, its officers, or its employees. The order is not
intended, however, to preclude judicial review of final agency
decisions in accordance with the Administrative Procedure Act, 5
U.S.C. 701 et seq.
Sec. 6. This order is effective immediately.
THE WHITE HOUSE
PRESIDENT CLINTON ANNOUNCES INCREASE IN MINIMUM WAGE
Friday, February 3, 1995
To reward work in an economy that in 1994 saw the best job growth in a decade,
President Clinton will today announce his proposal to raise the minimum wage to $5.15 an
hour over two years -- through two 45 cent increases.
This news comes in the midst of more good news today for the economy under the
Clinton administration. This morning, the Department of Labor reported that more than 6
million jobs have been created since President Clinton took office. In addition, the
unemployment rate has dropped 20 percent to date under President Clinton.
A fact sheet and charts on the President's minimum wage proposal are attached.
House Minority Leader Richard Gephardt (D-MO) will open the announcement in the
Rose Garden today, followed by Senate Minority Leader Tom Daschle (D-SD). The Vice
President will then speak and introduce the President for his remarks.
-30-30-30-
REWARDING WORK: THE CASE FOR INCREASING THE MINIMUM WAGE
The President's proposal would increase the minimum wage from $4.25 to $5.15 over two years,
through two 45 cent increases. The last increase, passed by an overwhelming, bipartisan vote
in 1989, and implemented in 1990 and 1991, was also a 90 cent increase in two 45 cent stages.
For a full-time, year-round worker at the minimum wage, a 90 cent increase would raise yearly
income by $1,800 -- as much as the average family spends on groceries in over 7 months.
MAINTAINING THE HISTORIC VALUE OF WORK: If the minimum wage were to stay at its current
level of $4.25, it would fall to its lowest real level in 40 years. Indeed, the real value of the minimum
wage is now 27% lower than it was in 1979, and has fallen 54 cents in real value since its last increase
in April 1991. The first half of the President's 90 cent proposal simply restores the minimum wage to its
value at the time of the last increase.
RAISING THE MINIMUM WAGE PRIMARILY HELPS ADULT WORKERS MOST OF WHOM
RELY ON THEIR MINIMUM WAGE JOB TO SUPPORT THEIR HOUSEHOLDS: Nearly two-thirds
of minimum wage workers are adults (64%); over one-third of minimum wage workers (39%) are the sole
breadwinners in their families; and the average minimum wage worker brings home half of his or her
family's earnings. Thus, a rise in the minimum wage is a significant boost to the standard of living of
millions of households.
REWARDS WORK OVER WELFARE: The minimum wage increase provides another crucial measure
to reward work and ensure that there is a strong incentive to choose work over welfare.
NEARLY 11 MILLION WORKERS WOULD BENEFIT FROM THE PRESIDENTS PROPOSAL TO
INCREASE THE MINIMUM WAGE: Nearly 11 million workers, paid by the hour, earn between $4.25
and $5.14. Research indicates that an increase in the minimum wage to $5.15 could have a "ripple" effect
on the couple million workers who earn within 50 cents of the new minimum wage.
EMPIRICAL EVIDENCE SHOWS THE PRESIDENTS PROPOSAL CAN INCREASE WAGES
WITHOUT COSTING JOBS: Over a dozen empirical studies have found that moderate increases in the
minimum wage do not have significant effects on employment. These studies include state-specific
research that shows that large state increases in the minimum wage did not result in significant job
impacts. As Nobel Laureate Robert Solow stated: "[T]he evidence of job loss is weak. And the fact that
the evidence is weak suggests that the impact on jobs is small."
A 90 CENT INCREASE IN THE MINIMUM WAGE WILL LIFT A FAMILY OF FOUR OUT OF
POVERTY. The dramatic extension of the Earned Income Tax Credit helped lift hundreds of thousands
of working families out of poverty. Yet, by 1996, even the EITC is not enough to lift above the poverty
line a family of four making the minimum wage. With the 90-cent minimum wage increase, food stamps,
and the EITC, a family of four with a full-time, year round minimum wage worker would be lifted above
the poverty line.
THE LAST MINIMUM WAGE INCREASE -- ALSO 90 CENTS -- GARNERED STRONG
BIPARTISAN SUPPORT. In 1989, the minimum wage was passed by votes of 382 to 37 (135
Republicans) in the House, and 89 to 8 in the Senate (36 Republicans) and was supported by Senator Dole
and Representative Gingrich.
Appendix Table. Value of the Minimum Wage, 1955-1995
Minimum Wage
Value of the
Value of the
as a Percent of the
Minimum Wage,
Minimum Wage,
Average Private
Year
Nominal Dollars
1995 Dollars*
Nonsupervisory Wage
1955
$0.75
$3.94
43.9%
1956
1.00
5.16
55.6
1957
1.00
5.01
52.9
1958
1.00
4.87
51.3
1959
1.00
4.84
49.5
1960
1.00
4.75
47.8
1961
1.15
5.41
53.7
1962
1.15
5.36
51.8
1963
1.25
5.74
54.8
1964
1.25
5.67
53.0
1965
1.25
5.59
50.8
1966
1.25
5.43
48.8
1967
1.40
5.90
52.2
1968
1.60
6.49
56.1
1969
1.60
6.21
52.6
1970
1.60
5.92
49.5
1971
1.60
5.67
46.4
1972
1.60
5.51
43.2
1973
1.60
5.18
40.6
1974
2.00
5.89
47.2
1975
2.10
5.71
46.4
1976
2.30
5.92
47.3
1977
2.30
5.56
43.8
1978
2.65
6.00
46.6
1979
2.90
5.99
47.1
1980
3.10
5.76
46.5
1981
3.35
5.68
46.2
1982
3.35
5.36
43.6
1983
3.35
5.14
41.8
1984
3.35
4.93
40.3
1985
3.35
4.76
39.1
1986
3.35
4.67
38.2
1987
3.35
4.51
37.3
1988
3.35
4.33
36.1
1989
3.35
4.13
34.7
1990
3.80
4.44
37.9
1991
4.25
4.77
41.1
1992
4.25
4.63
40.2
1993
4.25
4.50
39.2
1994
4.25
4.38
n/a
1995
4.25
4.25
n/a
*Adjusted for inflation using the CPI-U-XI.
Source: Center on Budget and Policy Priorities
The Real Minimum Wage
1960-1995
1994 Dollars
7
6.5
$6.29
6
$5.82
5.5
5
4.5
4
W
3.5
1960
1965
1970
1975
1980
1985
1990
1995
NOTE: Minimum wage is in 1994 CPI-U-XI Dollars. The inflation rate for 1995 is assumed to be 3.2 percent.
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
May 19, 1995
REMARKS BY THE PRESIDENT
AT WOMEN'S BUREAU RECEPTION
The South Lawn
5:38 P.M. EDT
THE PRESIDENT: Thank you very much.
Sitting here listening to my marvelous wife speak, I
was thinking, you know, I've been seeing her lately long
distance, on Oprah Winfrey and on the -- (laughter) -- Morning
Show this morning. And I thought, boy, I'm glad she lives here.
(Laughter and applause.)
I want to thank Secretary Reich and the Women's
Bureau Director, Karen Nussbaum. She has done a wonderful job.
I am very grateful to her and to him. (Applause.)
But I think it's important that we recognize that
women in the workplace are caught in a lot of cross-currents
today, because all American workers, or at least more than half
of us, are working longer hours for the same or lower pay that we
were making 10 years ago. And therefore, more and more parents
are working harder for the same or less and spending less time
with their children. Women feel this pressure very deeply
insofar as they have either sole, primary or even just half of
the responsibility for taking care of their children as well as
earning a living. Because male workers over the age of 45, on
average, have lost 14 percent of their earning power in the last
10 years, women in the work force and in the home feel the
anxiety of their husband's sense of loss and insecurity and
frustration and anger.
What is causing all this and what are we to do about
it? Well, what is causing it all is the impact of the global
economy and the dramatic revolution in technology on our society
-- opening up all kinds of new changes in ways that are perfectly
wonderful if you can access them, but terrifying if you cannot.
For example -- we don't have the figures yet on '94,
but I think '94 will confirm '93's trend -- in 1993 we had the
largest number of new businesses started in America in any year
in history, and the largest number of new millionaires in America
in any year in history. And that is a good thing. That is a
good thing. And that is happening because so many of us are now
able to access the world of the future. Many of you in this room
are part of the trend toward a brighter, bigger, broader
tomorrow.
But there is also a fault line in our society that
is splitting the middle class apart, putting unbearable pressures
on families, making them less secure and making them less able to
live up to the fullest of their abilities. You know it, and I
know it.
That's why the Family and Medical Leave Law was
important. If people are going to be working for smaller
companies, not bigger ones, and moving around, at least they
ought to know they can take some time off without losing a job if
there's someone sick in their family or if a baby is born or some
other emergency arises. (Applause.) That's why it was
important. (Applause.)
That's why the efforts of the Secretary of Labor and
the Secretary of Education to create a fabric, a seamless fabric
of lifelong learning -- whenever people lose their jobs or feel
that they're underemployed -- it's terribly important.
(Applause.)
And that's why I believe it is especially important
to women that we raise the minimum wage this year. (Applause.)
Women represent three out of five minimum wage workers, but only
half the work force.
I have done everything I could to create a climate
in which people are encouraged to choose work over welfare, in
which people are encouraged to be successful parents and
successful workers. I believe that. That's what the Earned
Income Tax Credit was all about in 1993. (Applause.)
Let me tell you what that meant -- that meant this
year that the average family of four with an income under $27,000
got a $1,000 tax cut below what they paid before this
administration came into office. And it means three years from
now, if the Congress will stick with it and not repeal it, we
will be able to say that no one who works full-time and has
children at home, when they go home from work, will live below
the poverty line. That is the best war against welfare we could
wage. (Applause.)
But it isn't enough. If we do not raise the minimum
wage this year, next year it will be in real dollar terms, the
lowest it has been in 40 years. Now that is not my idea of what
the 21st century American economy is all about. I want a smart
work, high- wage economy, not a hard-work, low-wage economy. And
the working women of America and their children and their
husbands deserve it as well. (Applause.)
You know, I have a -- I don't get to watch a lot of
kind of extra television, but the other night, just by accident,
I was watching a news program where a special was being done on
the minimum wage. And -- I don't even know if it was a national
program or one of the state networks around here, but they went
down south to a town that had a lot of minimum wage workers. And
they went in this plant to interview a remarkable woman who
worked in this plant at a minimum wage. And they said to this
lady: You know, your employer says if we raise the minimum wage
that they'll either have to lay people off or put more money into
machinery and reduce their employment long-term. What do you say
to that? I could not have written the script. (Laughter.) This
lady sort of threw her shoulders back and looked into the eyes of
the television reporter and said: Honey, I'll take my chances.
(Laughter and applause.)
If we are going to bring our budget deficit into
balance, which will be good for all of us; if we're going to have
to over a period of years cut back on expenditures that the
government used to make, that makes it even more important for
people who do go out into the private sector and work full-time,
play by the rules, and want to make their own way without public
assistance, to be rewarded for that work. This is a huge issue.
....
I thank you all. Please stay around. Have a good
time. We're delighted to see you. Good-bye. Thank you.
(Applause.)
END 5:58 P.M. EDT
Legislative Background - Minimum Wage - 1989
* Last increase (from $3.35/hour to $3.80 on 4/1/90 and
$4.25/hour on 4/1/91) passed Congress in 1989 in a bi-partisan
agreement following an earlier veto by President Bush:
Senate Vote: 89 - 8
House Vote: 382- - 37
(see attached list of votes)
*
President Bush proposed the increase to $4.25 an hour and
refused to accept any increase above that;
*
President Bush had vetoed a Democratic attempt to raise minimum
wage to $4.55 over three years and Congress failed to override
the veto - his first successful veto as President;
* Cong. Goodling (R-PA) was quoted at the time as stating that
Republican lawmakers were "uneasy" about President Bush's
position and "don't want to go to the wall a second time. " Cong.
Goodling introduced his own minimum wage bill that proposed a
three year phase to $4.25/hour, a training wage and expansion of
the earned-income tax credit. He voted for final passage of the
minimum wage increase;
*
The Labor Secretary at the time was Elizabeth Dole;
*
The Senate and the House were both controlled by Democrats;
*
The bill signed by President Bush included a training wage for
teenagers between 16 and 19;
*
Sen. Dole (R-Kan) (voted for final passage)
"I think that many of us feel that this is not an
issue where we ought to be standing and holding up anybody's
getting a 30- to 40-cents-an-hour- increase, at the same
time we are talking about capital gains. I never thought
the Republican Party should stand for squeezing every last
nickel from the minimum wage. "
*
The Senate tabled an amendment by Sen. Hatch that would have
barred Congress from passing any legislation that would increase
the costs of certain small business (the small business exemption
from the minimum wage was increased to cover small businesses
with sales of less than $500,000 (from $362,500) by the bill
itself;
* The Senate tabled an amendment by Sen. Gramm (R-Tex) which
would have removed the provision which prevented farmers from
using the training wage for teenage farmworkers;
*
Much of the current Senate and House Leadership voted for
minimum wage increase in 1989 - including Dole, Lott, Gramm,
Gingrich and Kassebaum. However, Armey, Delay, Livingston -
voted against (see attached list) ;
* Key Senate Republicans supporters in 1989 (supported an attempt
at a Dem. compromise)
Sen. Cohen (R-Maine)
Sen. Hatfield (R-Ore.)
Sen. Jeffords (R-Vermont)
Sen. Packwood (R-Ore.)
Sen. Pressler (R-SD)
Sen. Specter (R-Penn)
*
Key Senate Republicans in Opposition:
Sen. Mack (R-Florida)
Sen. Nickles (R-OK)
Sen. Helms (R-NC)
Sen. Hatch (R-Utah)
* Governor Wilson voted for the minimum wage increase as a
Senator in 1989.
*
Senate Democrats of concern (voted against Dem. compromise at
$4.55 or cloture in 1989) :
Sen. Hollings (D-SC)
Sen. Bennett Johnston (D-La)
Sen. Heflin (D-A1)
Sen. Exon (D - NE)
Sen. Campbell (D-Col) (voted to uphold Bush's veto in
House)
Senators in the Democratic and Republican Leadership their votes
on H.R. 2710 final passage (minimum wage).
SENATE LEADERSHIP
YES
Democrats
Breaux -- Deputy Whip
Byrd -- Ranking on Appropriations
Daschle -- Minority Leader
Ford -- Minority Whip
Harkin -- Ranking on the Appropriations, Labor Subcommittee
Kennedy -- Ranking on the Labor Committee
Mikulski -- Secretary of the Democratic Party
Reid -- Co-Chair of the Democratic Polciy Committee
Republicans
Cochran -- Chair Republican Conference
Dole - - - - Majority Leader
D'Amato -- Campaign Committee Chair
Lott - - - - Majority Whip
Kassebaum -- - Chairman of Labor Committee
Hatfield -- Chair of Appropriations Committee
Specter -- Chair of the Appropriations Labor Subcommittee
NO
Democrats
None
Republicans
Mack -- Policy Committee
Nickles -- Chair of the Republican Policy Committee
1
SENATE VOTES ON HR 2710 (Minimum wage -- Final Passage)
Members that are still in the Senate for the 104th Congress)
YES
Democrats
Biden
Bingamen
Bradley
Breaux
Bryan
Bumpers
Byrd
Conrad
Daschle
Dodd
Exon
Ford
Glenn
Graham
Harkin
Heflin
Hollings
Inouye
Johnston
Kennedy
Kerrey
Kerry
Kohl
Lautenberg
Leahy
Levin
Lieberman
Mikulski
Moynihan
Nunn
Pell
Pryor
Reid
Robb
Rockefeller
Sarbanes
Shelby
Simon
Additonal Democratic Senator that did not vote or express a
position
Baucus
2
SENATE VOTES ON HR 2710 (Minimum wage -- Final Passage)
Members that are still in the Senate for the 104th Congress)
YES
Republicans
Bond
Burns
Chafee
Coats
Cochran
Cohen
D'Amato
Dole
Domenici
Gorton
Gramm
Grassley
Hatfield
Jeffords
Kassebaum
Lott
Lugar
McCain
McConnell
Murkowski
Packwood
Pressler
Roth
Simpson
Specter
Stevens
Thurmond
Warner
3
SENATE VOTES ON HR 2710 (Minimum wage -- Final Passage)
Members that are still in the Senate for the 104th Congress)
NO
Democrats (0)
Republicans
Hatch
Helms
Mack
Nickles
4
HOUSE LEADERSHIP VOTES ON FINAL PASSAGE OF HR 2710
HOUSE
Democrats
YES
Gephardt
Bonior
Clay
Obey
NO
None
Repubilcans
YES
Gingrich
Goodling
Porter
NO
Armey
Delay
Livingston
1
HOUSE VOTES ON FINAL PASSAGE OF HR 2710 (MINIMUM WAGE) FOR
MEMBERS OF THE 104TH CONGRESS
YES
Democrats
A
Ackerman
B
Beilenson
Berman
Bevill
Bonior
Borski
Boucher
Browder
Brown, George
Bryant, John
Burton, Dan
C
Cardin
Chapman
Clay
Clement
Coleman
Collins, Cardiss
Condit
Costello
Coyne
D
Dellums
DeFazio
de la Garza
Dicks
Dingell
Dixon
Durbin
E
Engel
Evans
2
F
Fazio
Flake
Foglietta
Frank
Frost
G
Gejdenson
Gephardt
Geren
Gibbons
Gonzalez
Gordon
H
Hall, Ralph
Hall, Tony
Hamilton
Hayes
Hefner
Hoyer
J
Jacobs
Johnson, Tim
Johnston, Harry
K
Kanjorski
Kaptur
Kennedy, Joe
Kennelly
Kildee
Kleczka
L
LaFalce
Lantos
Laughlin
Levin
Lewis, John
Lipinski
Lowey
3
M
Manton
Markey
Martinez
Matsui
McDermott
McNulty
Mineta
Mfume
Mollohan
Montgomery
Murtha
N
Neal, Richard
O
Oberstar
Obey
Ortiz
Owens, Major
P
Pallone
Parker
Payne, Donald
Payne, Lewis
Pelosi
Pickett
Poshard
R
Rahall
Rangel
Richardson
Rose
4
S
Sabo
Sawyer
Schroeder
Schumer
Sisisky
Skaggs
Skelton
Slaughter
Spratt
Stark
Stenholm
Stokes
Studds
T
Tanner, John
Taylor, Gene
Tauzin
Torres
Torricelli
Towns
Traficant
V
Vento
Visclosky
Volkmer
W
Waxman
Williams, Pat
Wilson
Wise
Wyden
Y
Yates
Additional Democrats that did not vote yes or no
Did not vote or make a position known
Conyers
Moakley
Announced For
Ford, Harold
5
HOUSE MEMBERS THAT VOTED FOR FINAL PASSAGE OF HR 2710 (minimum
wage) that are in the 104th Congress
YES
Republicans
B
Ballenger
Bateman
Bliley
Boehlert
Bereuter
Bilirakis
C
Coble
Clinger
D
Duncan
E
Emerson
F
Fields
G
Gekas
Gillmor
Gilman
Gingrich
Goodling
Gunderson
H
Hastert
Herger
Houghton
Hunter
Hyde
J
Johnson, Nancy
K
Kasich
Kolbe
5
L
Leach
Lewis, Jerry
Lightfoot
M
McCrery
McDade
Meyers, Jan
Moorhead
Morella
Myers, John
P
Packard
Petri
Porter
Q
Quillen
R
Regula
Roberts, Pat
Rogers
Ros-Lehtinen
Roth
Roukema
S
Saxton
Schaefer
Schiff
Sensenbrenner
Shaw
Shays
Shuster
Skeen
Smith, Chistopher
Smith Lamar
Soloman
Spence
Stearns
T
Thomas, William
U
Upton
7
V
Vucanvoich
W
Walker
Walsh
Weldon, Curt
Wolf
Y
Young, Don
Young, C.W. "Bill"
Additional Republican members that did not vote yes or no
Did not vote or express an opinion
Molinari
8
HOUSE VOTES ON FINAL PASSAGE OF HR 2710 (MINIMUM WAGE) FOR ALL
MEMBERS OF THE 104TH CONGRESS
NO
Democrats
Miller, George (California)
Republicans
A
Archer
Armey
B
Baker, Richard
Barton
Bunning
Burton
C
Callahan
Crane
Combest
Cox
D
DeLay
Dornan
Drier
F
Fawell
G
Gallegly
Goss
9
H
Hansen
Hancock
Hefley
Hunter
L
Livingston
M
McCollum
R
Rohrabacher
O
Oxley
P
Paxon
S
Stump
10
MEMBERS OF THE SENATE THAT WERE IN THE HOUSE AND VOTED
ON FINAL PASSAGE OF HR 2710
YES -- Democrats
Boxer
Akaka
YES -- REPUBLICANS
Craig
Snowe
DeWine
Inhofe
11
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FOR FEDERAL PROCUREMENT POLICY
FAX COVER SHEET
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FROM:
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We would strongly oppose an EO requiring federal contractors to
pay a minimum wage higher than the statutory minimum wage:
1) This would have a significant budgetary impact in a time of
unprecedented budget stringency.
2) This goes far beyond any existing executive order in the
extent to which it uses the procurement system to regulate the
economy.
3) To claim that paying out more money is a way to improve the
"economy and efficiency" of what the government buys does not
meet a laugh test.
4) This would cause many existing government contractors to
withdraw from government business, because they will be unwilling
to disturb their entire existing wage structure (where a minimum
wage increase would produce ripple effects on other wages within
the company) in order to do business with the government.
Companies that produce commercial products for the government do
not produce these products off separate product lines, and
complying with this EO would require they make changes involving
their non-government business as well. Having fewer companies
willing to do business with the government means both higher
prices for the government (due to less competition) and
contradicts the Administration's reinventing government efforts
that seek to attract more contractors to do business with us.
Economy it
the way I's drafted,
fed generes shall contract only
w/ co's That pay
Even if it's just whekers in
the condinct
Miller
structure
w/d Effect Earlys wagz
2wld lead a 5131 # of CD's On do
w/draw from good. pric. mkt.
that include defense -
lindy 61 disraption in
def. contracts
Davis - Bacan writlange
illegal
Rate} Krueger oppose
POTO8 to UPOTUS
terrible process
since WE'VE already unbraced min. wage
- macro ayuments not relevant
productive distortion - requesting this are part of Econting but
overall
not The other
impact on
budget Cs (B/gr.)
(or well hire fewer people)
many co's will withdraw
process complexidies F
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politics
so blavantly political That it w.ll appear to Dr
pandering
effort to 7 fee power]
B.K. is adamontly apposed to win. wage