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Statement For The Record Alexis M. Herman
Secretary of Labor



COMMITTEE ON EDUCATION AND THE WORKFORCE
HOUSE OF REPRESENTATIVES

OCTOBER 7, 1999

I am pleased to be able to offer my remarks today in strong support of the President's proposal to increase the minimum wage. For more than 11 million American workers, increasing the minimum wage from $5.15 an hour to $6.15 an hour over two years is neither a political issue nor an economic debate. Many of these workers, roughly 7 million, are women who are working hard to make ends meet - and 1 million of them are single and caring for their families. This increase is about providing decent housing, food, and other necessities for them and their families on just $10,712 a year in pay. Mr. Chairman, these hard-working Americans deserve a raise.

When we last raised the minimum wage and expanded the earned income tax credit, we took important steps to reward work and help millions of Americans to move off welfare and raise their families with dignity. This Administration has sought to build a nation that rewards responsibility and work. But we must make certain that the progress made by these Americans is not eroded, and that there is continued progress towards ensuring that all working families are lifted out of poverty. That is why we must increase the minimum wage.

In 1996, the passage of welfare reform sent a clear message to America's workers, "Work pays." America's workers have kept their end of the bargain. They are working hard, building stronger families and helping to revitalize their local communities. Now we need to continue to do our part. Low earnings continue to plague many women who have left the welfare rolls and entered the workforce. The median wage of former welfare recipients in the labor market is about $6.60 per hour, indicating that a large portion would benefit from a minimum wage increase up to $6.15 per hour.

With a minimum wage increase, the employment of welfare recipients might well rise, as higher wages induce more of them to enter the labor market. Indeed, policies to make work pay, such as the earned income tax credit, have raised the employment rates of single mothers over the 1990's, and recent studies have found that higher minimum wages reduce welfare participation and raise the earnings of parents leaving welfare for work. Many minimum wage workers are still making the transition from welfare to work. For them, any obstacle on the road to work - a sick child, a car that won't start, or a baby-sitter who does not show up - can be a detour. With a few more dollars, they can stay off welfare and on the path of progress.

The minimum wage increase would help, not hurt, poor families. Studies show that minimum wage increases disproportionately benefit workers in families with below-average incomes. An increase in the minimum wage would, therefore, help a wide range of families with low-wage workers who need a raise.

Opponents of an increase in the minimum wage overlook the benefits to families and communities, and claim an increase will hurt those it is intended to help. When we last raised the minimum wage, opponents claimed that jobs would be lost throughout the economy - especially in lower-wage sectors such as retail stores and restaurants. They predicted that unemployment rates would skyrocket for teenagers and disadvantaged workers. Some claimed that inflation would go through the roof.

The facts have proven the critics wrong. Unemployment and inflation are the lowest they have been in roughly 30 years. Since the last increase signed into law by President Clinton became effective, nearly 9 million net new jobs have been created. More than 1.2 million new retail jobs have been added, and restaurant jobs have grown by over 400,000.

Unemployment has also declined significantly over the same period, achieving many record lows since August 1996 - including record lows among Hispanics, blacks, black teens and high school dropouts. Employment has increased dramatically as well, including employment for welfare recipients and single women taking care of their families. Making work pay has had a positive impact on the lives of our least paid workers.

Mr. Chairman, raising the minimum wage is about honoring the values that make this country great. Most importantly, it is about making sure that the people who clean offices, serve coffee and care for our children are compensated fairly and are not left behind. Our Nation's extraordinary prosperity rests on the efforts of all its workers. And this Administration believes they deserve to be treated with dignity and they deserve a fair share of our prosperity. Three years ago we worked together to raise the minimum wage. We need to do so again today.


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