Minimum Wage Debate and Poll
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In the U.S., Massachusetts enacted the earliest minimum wage law in 1912, and eight other states followed suit the next year. The U.S. laws were applicable only to women and minors. American labor unions at that time were engaged in a nationwide organizing campaign among male workers, and they opposed the application of such legislation to men as a possible deterrent to organization, because the possibility of obtaining a minimum wage by government action might lessen the incentive to join a union. It was not until 1933, when the federal government moved to alleviate the widespread hardship caused by the prevailing economic depression by enacting the National Industrial Recovery Act, that minimum wage scales were set for both men and women. Two years later this act also was declared unconstitutional by the Supreme Court. Nevertheless, a number of states passed minimum wage laws in ensuing years, and in 1938 the federal government enacted the Fair Labor Standards Act, fixing the minimum wage of workers employed in interstate commerce at $.25 an hour and providing for the raising of the minimum to $.40 an hour after seven years. In 1968, when coverage was extended to certain types of farm labor and to previously excluded retail store, restaurant, and hotel employees. An additional 7 million government, domestic service, and retail chain employees were covered in 1974. The minimum wage rose to $2.30 an hour in 1978 and $3.35 in 1981. Legislation in 1989 provided for a gradual increase in the minimum wage to $4.25 by 1991, but permitted a "training wage" of $3.62 (as of 1991) for 16- to 19-year olds. In 1996 Congress passed legislation to raise the minimum wage from $4.25 to $5.15 an hour by 1997.
The minimum wage was established to ensure U.S. workers were fairly compensated for a day's work.
Employers should only pay what they feel is necessary to get the workers they need. Let supply and demand determine wages.
The Labor Department said workers earn less now than their counterparts earned 30 years ago. If converted to 1998 dollars, the real value of the minimum wage in 1968 was $7.49 an hour, significantly higher than the current level of $5.15 an hour.
Before the 1996 increase opponents predicted that inflation would rise, small businesses would suffer and the unemployment rate would spike upward. That hasn't happened. Unemployment actually went down half a percent.
FACT 8 10-5-99
House Democrats began a petition drive Tuesday aimed at forcing majority Republicans to quickly schedule a vote on a bill increasing the minimum wage by $1 over two years. Republicans concede that the minimum wage bill would pass if it got to a floor vote. Instead of simply handing Democrats one of their signature issues, Republicans want to put their stamp on it with a tax package filled with business sweeteners.
FACT 9 10-18-99 from Citizens for Tax Justice
Tax breaks included in the minimum wage increase bill introduced by Rep. Rick Lazio (R-NY), John Shimkus (R-IL) and others would cut taxes by close to $100 billion over the next decade, with almost three-quarters of the tax cuts targeted to the best-off one percent of Americans.
An analysis of the tax provisions of the Lazio-Shimkus bill released today by Citizens for Tax Justice finds that:
The best-off one percent of all taxpayers, those making more than $301,000 a year, would get average annual tax cuts of $5,999 each under the plan (in today's dollars). The top one-percent would enjoy 73.4% of the total tax cuts provided by the bill.
In contrast, the bottom 60 percent of all taxpayers would get only 2.7 percent of the tax cuts. The average tax reduction for the bottom 60 percent would be $4 a year.
"It's astonishing that a minimum wage bill supposedly designed to aid low-wage workers would actually give its biggest benefits to the highest-income people in the country," said Citizens for Tax Justice director Robert S. McIntyre.
The Republican and Democratic plans both contain tax breaks to help small businesses offset the cost of paying higher wages, but Daschle said the Republican plan goes too far.
``The Republican plan has almost nothing to do with small business tax relief,'' Daschle said at a news conference. ``It overwhelmingly benefits wealthy individuals. Our tax cuts would cost $28 billion over 10 years. Theirs would cost $75 billion over 10 years.
``Our tax cuts are fully paid for,'' he added. ``Republicans only pay for the first year of their tax cut. After that, the money for the their tax cuts will come out of other essential programs, or out of Social Security or both.''
Democrats criticized a provision in the Republican plan that would change the calculation for overtime pay so that bonuses, commissions and other forms of compensation would no longer be included in the calculation for overtime pay. Sen. Edward Kennedy, a Massachusetts Democrat, said the provision ``would mean a significant and dramatic reduction in 73 million Americans' overtime pay.''
FACT 12Representative Rick Lazio (R-NY) and others have joined together to propose a "minimum wage" bill that would most benefit none other than the best-off 1% of Americans. Tying the meager raise in the minimum wage to tax breaks, Lazio's bill proposes changes in tax laws including:
The bill results in tax cuts totaling over $97 billion over the next decade --73.4% of which would go directly to those tax payers earning salaries of over $301,000 a year.