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Senator Murray Works to Raise the Minimum Wage and Fights Attacks on Working Families

Jan 24 2007

Murray Fights "Tip Credit" Wage Cut, Unfair Overtime Proposal, and Weakening of 40-Hour Work Week

Update: Senate Passes Legislation Increasing the Federal Minimum Wage

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(Washington, D.C.) – Today on the Senate floor, U.S. Senator Patty Murray (D-Wash) stood up for America's workers by pushing to raise the federal minimum wage for the first time in 10 years. Murray cited the example of Washington state, where a high minimum wage has supported jobs and economic growth.

"America's workers have helped our country make tremendous gains in productivity and economic growth, and they deserve to share in the prosperity they've created," Murray said. "Washington State has the highest minimum wage in the country. We are living proof that a livable minimum wage is good for our state economy, good for our small businesses, and good for our citizens."


Murray spoke out against three Republican attempts to undermine working families. Murray urged the Senate to reject a "tip credit" proposal that would cost 120,000 Washington workers about $12,000 in income each year. She also spoke out against a Republican plan to force workers to accept "comp time" instead of the overtime pay they are entitled to. And she pushed back against a Republican proposal that would undermine the 40-hour work week.



Senator Murray's full remarks follow:



Mr. President, America's workers deserve a raise and that's why I rise in strong support of S.2, 'The Fair Minimum Wage Act of 2007.'



America's workers have helped our country make tremendous gains in productivity and economic growth, and they deserve to share in the prosperity they have created. I am very proud to represent a state that has a high minimum wage, and I want to share some of the lessons we've learned about providing a living wage in my home state of Washington.



Mr. President, we need to do the right thing and pass a clean minimum wage bill now without any of the anti-worker amendments that may be offered by the other side.



The Minimum Wage Has Not Kept Pace



As we have heard, it’s been almost 10 years since Congress last raised the minimum wage. During this time, the real value of that wage has fallen by more than 21%. At the same time, the costs of health care, energy, and housing have gone up significantly. As a result, many middle class workers have been squeezed. I can only imagine the challenges that minimum wage workers face everyday while trying to maintain their families and their dignity on $10,000 a year.



We can be proud that America's businesses have prospered over the last decade, thanks to a 31% increase in worker productivity and a huge 47% increase in profits. Now it’s time for the least-paid of America's workers to share in those gains.



Lessons from Washington State



Now during this debate, we've heard the usual claims that raising the minimum wage hurts businesses. In my home state, that has not been our experience.



Washington State has the highest minimum wage in the country. We are living proof that a livable minimum wage is good for our state economy, good for our small businesses, and good for our citizens.

  • In 2006, our state’s average unemployment rate was 4.9% -- the lowest since 1999.


  • We created 79,000 new jobs.


  • Our poverty rate is 11.9%, which is lower than the national average.


  • And our median household income stands at $49,000, much higher than the national average.


Our state minimum wage, which is indexed to inflation, has helped make for good labor productivity and a healthy economy in Washington state.



We’ve heard from my esteemed colleague -- Senator Kennedy, the Chairman of the HELP Committee -- that states with higher minimum wages create more small businesses and more jobs. Last year, the Fiscal Policy Institute reported that states with a higher minimum wage created nearly 10 percent more jobs and 5 percent more small businesses. A May 2006 Gallup Poll found that 86% of small business owners thought that raising the minimum wage did not affect their business.



Now I could cite statistics like that all day. But I think the best evidence is what continues to happen in my state compared with a neighboring state that has a much lower minimum wage. Washington's minimum wage is $7.93 per hour. Right next door to us, Idaho has a minimum wage at the federal level of $5.15 per hour.



Since 1998, when Washington voters passed our minimum wage law, Washington employers have been flooded with job applications from Idaho. Now Washington companies can pick the best qualified workers from the region.



On January 11th, the New York Times reported that Washington state businesses have seen great benefits, while Idaho businesses have not. Mr. President, I ask unanimous consent to insert this New York Times article by Timothy Egan into the Record at the conclusion of my remarks.



The article quotes Don Brunell, the president of the Association of Washington Business. He says that raising the federal minimum wage is, "almost a no-brainer." Washington’s strong economy is proof that even with the highest minimum wage in the U.S., as Mr. Brunell put it, "Washington is a great place to do business."



Now, some people predicted that small businesses would be hurt in Washington state. Instead, as the article notes, they've prospered beyond their expectations. So we have the opportunity to do a lot of good here – not just for workers, but also for businesses and for our economy.



We Should Pass a Clean Bill



But to do the most good, we've got to pass a clean bill – one that is free from unrelated tax provisions and one that rejects anti-worker amendments.



Now historically, Congress has not found it necessary to pair a minimum wage increase with a package of tax giveaways. In fact, since 1936, Congress has raised the minimum wage nine times, but only once has such an increase been paired with tax rollbacks. We should pass a clean bill that gives workers the raise they are long overdue.



We Must Protect Workers



In addition, we should not let this bill be used to weaken the rights of America's workers. As the Chairman of the HELP Subcommittee on Employment and Workplace Safety, I'm very troubled by some of the amendments being floated by my Republican colleagues.



There are proposals to –

  • attack the 40-hour work week,


  • take away workers' overtime,


  • and force a pay-cut on workers who earn their living from tips.


There is also a deeply flawed proposal that would change the treatment of professional employer organizations under the Tax code.



Protect the 40-Hour Work Week and Overtime



This week – while we try to raise the wages of one group of workers, we must fend off more Republican attacks on working families and their right to earn overtime.



We all know how the demands of work and family pull two-career parents away from their loved ones all too often these days. For parents, getting their kids to and from school and to after-school activities isn't easy, especially when you're forced to work uncertain hours. The uncertainty of having to work – say 50 or 60 hours this week – and then 20 or 30 hours next week would put incredible new strains on overburdened families. Taking away their workplace rights and their ability to collect overtime would be a cruel and unwarranted double hit on America’s working families.



The Senate should once again reject these Republican comp time and 40-hour work week proposals because they would force a pay cut on millions of middle class workers. We know that for those workers who are eligible, overtime can amount to some 25% of their yearly income. We should not undermine the ability of working parents to balance their lives and share in the American dream.



The Republican comp time proposal would force our workers to take comp time instead of pay. On top of the pay cut, workers would be at the mercy of their employers when it came time to asking to use their accumulated comp time. And we all know that comp time often disappears under employer pressures of deadlines and other productivity needs.



I believe this Congress must protect these hard working Americans from an erosion of their quality of life and their ability to spend time with their families. We have to stop these attacks on working families and start moving in the right direction and that should include expanding the Family and Medical Leave Act.



Tip Credit Proposal Would Hurt 120,000 Washington State Workers



We also need to protect workers who rely on tips. As we've heard from my female colleagues on this floor, nearly two-thirds of all minimum wage workers are women. Many of them are single parents.



Raising the minimum wage can give them a small measure of economic security and the ability to better support their families. Many of these low wage workers are service workers -- people like hair dressers, maids and waitresses. And many service workers in Washington State rely on tips as a significant part of their livelihood. We should not support amendments that would undermine the tips that workers rely on. In Washington State it would mean a pay cut of some $12,000 annually for over 120,000 tipped workers



Tax Change Would Undermine Worker Safety and Burden Employers



Finally, I'm very concerned about the proposed tax changes for professional employer organizations (PEOs). I fear this change could undermine the fiscal stability of our state unemployment insurance and workers compensation funds. It would also put more burdens on employers who are already playing by the rules.



Further, it could reduce worker health and safety protections by undermining the incentives for companies to maintain safe and healthy workplaces. It could also provide an opening for those seeking to change the well-established rules of the employer/employee relationship under the Fair Labor Standards Act. I believe there should be serious thought and debate in the Congress before we make such fundamental changes in labor law.



Conclusion



Mr. President, in conclusion, we can do this right by passing a clean bill that finally gives America's workers the raise they have earned. Over the last 8 years, Washington State has proven that a minimum wage increase is good for our state’s economy, helps economic development, increases small business ownership, and of course helps our workers maintain their quality of life. I urge my colleagues to vote in favor of this bill to increase the minimum wage to finally give low income workers the raise they have earned and so richly deserve.