The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“EMPLOYEE COMMUTING FLEXIBILITY ACT OF 1996” mentioning the U.S. Dept of Labor was published in the House of Representatives section on pages H5478-H5485 on May 22, 1996.
The publication is reproduced in full below:
EMPLOYEE COMMUTING FLEXIBILITY ACT OF 1996
Mr. GOODLING. Mr. Speaker, pursuant to House Resolution 440, I call up the bill (H.R. 1227) to amend the Portal-to-Portal Act of 1947 relating to the payment of wages to employees who use employer owned vehicles, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to the rule, the committee amendment in the nature of a substitute, modified by the amendment printed in section 3 of House Resolution 440, is adopted.
The text of the committee amendment in the nature of a substitute, as modified, is as follows:
H.R. 1227
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
Section 1. This Act may be cited as the ``Employee Commuting flexibility Act of 1990''.
SEC. 2. PROPER COMPENSATION FOR USE OF EMPLOYER VEHICLES.
Section 4(a) of the Portal-to-Portal Act of 1947 (29 U.S.C. 254(a)) is amended by adding at the end of the following:
``For purposes of this subsection, the use of an employer's vehicle for travel by an employee and activities performed by an employee which are incidental to the use of such vehicle for commuting shall not be considered part of the employee's principal activities if the use of such vehicle for travel is within the normal communing area for the employer's business or establishment and the use of the employer's vehicle is subject to an agreement on the part of the employer and the employee or representative of such employee.''.
SEC. 3. EFFECTIVE DATE.
The amendment made by section 1 shall take effect on the date of the enactment of this Act and shall apply in determining the application of section 4 of the Portal-to-Portal Act of 1947 to an employee in any civil action brought before such date of enactment but pending on such date.
The SPEAKER pro tempore. Under the rule the gentleman from Pennsylvania, [Mr. Goodling] and the gentleman from Missouri [Mr. Clay] will each control 45 minutes.
Pusuant to the order of the House of today, the Chair intends to recognize the gentleman from Pennsylvania, [Mr. Goodling], and the gentleman from Missouri [Mr. Clay] for 15 minutes each, before postponing further consideration of the bill.
The Chair recognizes the gentleman from Pennsylvania [Mr. Goodling].
Mr. GOODLING. Mr. Speaker, I yield myself 1 minute.
Mr. MILLER of California. Mr. Speaker, will the gentleman yield?
Mr. GOODLING. I yield to the gentleman from California.
Mr. MILLER of California. Mr. Speaker, the markup tomorrow on IDEA, will that be postponed because of the consideration of H.R. 1227?
Mr. GOODLING. Mr. Speaker, reclaiming my time, yes.
Mr. Speaker, H.R. 1227, the Employer Commuter Flexibility Act, was reported favorably by voice vote from the Committee on Economic and Educational Opportunities, and I am pleased that we are considering it tonight. It was introduced and shepherded by the gentleman from Illinois [Mr. Fawell].
It is a simple, straightforward bill. It would clarify the Portal-to-
Portal Act to assure that employees may use an employer provided vehicle to commute from the employee's home to the job site and back home without necessarily making the commuting time compensable under the Fair Labor Standards Act. The Department of Labor has issued inconsistent opinions, and employers and employees are ow uncertain as to whether such programs, which are mutually beneficial to employers and employees, can continue.
Mr. Speaker, I yield 4 minutes to the gentleman from Illinois [Mr. Fawell] the author of the legislation.
(Mr. FAWELL asked and was given permission to revise and extend his remarks.)
Mr. FAWELL. Mr. Speaker, I rise in strong support of H.R. 1227, the Employee Commuting Flexibility Act. As the primary sponsor of the legislation, I want to take a moment to explain the need for, and the effect of the bill.
H.R. 1227 would amend the Portal-to-Portal Act to clarify that commuting to and from work in employer-owned vehicles is not an activity for which an employee must be compensated. The need for such a clarification arose because the Department of Labor issued a misguided interpretation in the summer of 1994 which indicated that employees generally must be paid for time spent commuting between home and the job site in employer-owned vehicles. This is in contrast to employees commuting in their own vehicles who are not paid for commuting time.
Needless to say, Mr. Speaker, this interpretation threatened to disturb the longstanding practice in the petroleum, construction, and other service industries where employees use company trucks and vans for commuting. I might add that the ability to use company vehicles is strongly desired by employees in these industries. Although the Department of Labor subsequently backed off somewhat from their 1994 interpretation, a legislative clarification is necessary to avoid any future misinterpretation which could result in thousands of dollars of compensation claims against employers who allow employees to use company vehicles for commuting to and from work.
Mr. Speaker, in the spirit of compromise, I have worked very closely with Congressman Rob Andrews in developing the final language of H.R. 1227. The bill, which was reported by voice vote from both subcommittee and full committee, includes two important protections for employees. The bill clarifies that the use of employer-owned vehicles by employees solely for the purpose of traveling to and from work will not constitute a compensable activity, provided that, first, the travel is within the normal commuting area for the employer's business or establishment; and second, the use of the vehicle is the choice of the employee and is based on an agreement between the employer and the employee or the representative of the employee.
Several of my colleagues have expressed concern that the legislation would somehow affect employee travel during the workday, such as between job sites. I want to make it very clear that the legislation will not affect any travel performed during the workday--it would still be a compensable activity under the provisions of H.R. 1227. Section 4(a) of the Portal-to-Portal Act, which this bill amends, applies only to activities which occur prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases the principal activity or activities. Thus, it is not necessary to repeat in H.R. 1227 that the language only applies to travel time which occurs at the beginning and end of the workday.
Mr. Speaker, I also want to take a moment to address several of the concerns which will be expressed by opponents of the legislation. First, they will claim that H.R. 1227 was originally described as seeking to do no more than codify the Department of Labor's April 1995 opinion letter. H.R. 1227 was introduced in March 1995, 1 month before the second Department of Labor opinion letter was issued, and is intended to clarify what has become a murky area of the law because of the first Department of Labor opinion letter which was issued in August 1994.
Opponents of this common sense bill will also argue that we are somehow undermining the rights of employees by permitting employers to force employees to use an employer-provided vehicle. Under the Fair Labor Standards Act, an employee is not permitted to waive their rights, nor is the employee's representative allowed to bargain or negotiate away those rights. If either of these situations were possible, then the protections afforded by the act would be compromised.
Hence the bill makes it clear that the use of the employer's vehicle is subject to an agreement between the employer and the employee or via a collective bargaining agreement. The ability of employees to use the employer's vehicle for traveling back and forth from home to work is voluntary in the sense that no employee must accept it. We did not, however, provide that the employee's use of the employer's vehicle could become a condition of employment. In some instances, it could, depending on the agreement between the employer and employee or the terms of a collective bargaining agreement.
On another point, H.R. 1227 states that activities which are merely incidental to the use of an employer-provided vehicle for commuting at the beginning and end of the workday are not considered part of the employee's principal activity or activities and therefore need not be compensable. We expect that the Department of Labor will provide guidance in this area, consistent with the purposes of H.R. 1227.
Communication between the employee and employer to receive assignments or instructions, or to transmit advice on work progress or completion, is required in order for these programs to exist. Likewise, routine vehicle safety inspections or other minor tasks have long been considered preliminary or postliminary activities and therefore not compensable. Merely transporting tools or supplies should not change the noncompensable nature of the travel.
Opponents may also claim that the legislation enables employers to transfer to employees the costs of maintaining the employer's vehicle. It is our intent that the employee incur no out-of-pocket or direct cost for driving, parking, or otherwise maintaining the employer's vehicle in connection with commuting in employer-provided vehicles. However, the employer shall not be responsible for unrelated expenses, such as an employee's tax liability under the provisions of the Internal Revenue Code which may result from the employee's personal use of the employer's vehicle or for traffic violations resulting from the improper operation of the vehicle by the employee.
Mr. Speaker, without belaboring the point, suffice to say the Employee Commuting Flexibility Act is a commonsense reform that I expect will receive broad support. In 99 out of 100 cases, employees enjoy the use of company vehicles to commute to and from their homes, as they have for many years, and have found it to be a convenient benefit that gives them great freedom in scheduling their workday. Employers too have appreciated the flexibility it gives them in scheduling work or deliveries for their customers.
Mr. Speaker, there are many to thank who have had a hand in ensuring the success of this legislation, and would particularly like to thank Chairman Goodling for his support as this bill moved through the committee process; Congressman Cass Ballenger, the chairman of the Subcommittee on Workforce Protections, for hard work in moving the bill forward; and Congressman Rob Andrews for his long-time interest in this issue and for his cooperation and input in working to arrive at this compromise.
The only way to permanently protect businesses and their employees from a misreading of the law is to clarify the statute to prevent any further confusion on this issue. H.R. 1227 will allow employers and employees to continue to enjoy the mutual benefits which result from the use of employer-
provided vehicles for commuting. I urge my colleagues to support this commonsense reform legislation.
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Mr. CLAY. Mr. Speaker, I yield myself 2 minutes.
Mr. Speaker, our Nation is undergoing tremendous economic change. We are moving into an age of great global trade and technological advancement, yet until today, the 104th Congress, a Republican-led Congress, has refused to deal with the most basic challenge we face, making sure that low-wage workers are not left behind in this new ever-
expanding and ever-changing economy.
In 1993 and 1994, President Clinton and the Democratic Congress worked hard to give working people a tax break through the earned income tax credit. This was a downpayment on our commitment to the principle that no one who works full time should live in poverty. The time has now come to pay the second installment on that commitment; to ensure that the minimum wage is a livable wage.
The last time Congress voted to increase the minimum wage was in 1989. Among the Republicans voting for the increase were the Speaker and the soon to be former majority leader in the Senate. Since 1989, the purchasing power of the minimum wage has declined to its lowest level in 40 years. The overwhelming majority of Americans, Mr. Speaker, support the President's call to increase the Federal minimum wage above its current rate of $4.25 an hour.
My Republican colleagues are trapped on the wrong side of this issue. They are paralyzed by their own political and philosophical contradictions. The very same Republicans who call for drastic reductions in assistance to the working poor refuse to increase the minimum wage. Now that the Republican leadership can no longer resist the tide demanding a minimum wage increase, it has devised a political strategy to poison the water.
If this House adopts the minimum wage amendment, as we should, we will then face amendments endorsed by the Republican leadership that will deny the minimum wage to as many as 10 million Americans. If the Goodling small business exemption passes, we will see the proliferation of sweatshops and the exploitation of farmworkers.
Mr. Speaker, I ask my colleagues to reject this Goodling amendment.
Mr. GOODLING. Mr. Speaker, I thought we were on portal to portal.
Mr. Speaker, I yield 2 minutes to the gentleman from North Carolina,
[Mr. Ballenger].
Mr. BALLENGER. Mr. Speaker, I am speaking on portal to portal, and today I rise in strong support of the Employee Commuting Flexibility Act, which will allow employees to continue to use company vehicles for commuting. This has been a common practice throughout many service industries, where employees can use company vehicles to commute between their homes and the job site.
In August of 1994, the Department of Labor took a position which penalized employers and employees who had worked out arrangements concerning the use of company vehicles. While the Department later backed away from that position, many employers are legitimately concerned about continuing to allow their employees to use company-
provided vehicles for commuting. Given that the Department has had two varying positions on this issue within a relatively short period of time, the Employee Commuting Flexibility Act provides much-needed clarification on the intention of the law concerning employee use of such vehicles.
If employees must be paid for the time that they spend commuting to and from work each day, employers will be forced to eliminate these programs. Employees will then have to commute to work in their own personal vehicles. Not only will this be inconvenient for both parties, but for many employees it may mean the added financial burden of having to fuel, insure, and maintain their own vehicle for commuting.
The Employee Commuting Flexibility Act will allow employers and employees to continue with such mutually beneficial arrangements, so long as the arrangement meets certain conditions. First, the use of the vehicle would be subject to an agreement between the employee and the employer. Second, the vehicle must be used for travel within the normal commuting area for the employer's business or establishment.
The clarification provided by this legislation will enable employers and employees to continue with arrangements which meet these conditions. The employee receives the benefit of transportation and the company receives the benefit of the employee being able to go directly to the job site. Employees will not be exploited and the company will not be unduly burdened with expense. This is commonsense legislation and I urge my colleagues to support the bill.
Mr. CLAY. Mr. Speaker, I yield 3 minutes to the gentleman from California, [Mr. Miller].
(Mr. MILLER of California asked and was given permission to revise and extend his remarks.)
Mr. MILLER of California. Mr. Speaker, the reason we are here today is because Americans working at the minimum wage need a raise. This is where they would be if the minimum wage were indexed for inflation; and, unfortunately, because it has not been raised, this is where American workers are today. They are back at a point where the minimum wage was many, many years ago in terms of its purchasing power.
Finally, after months of struggle, we have persuaded the Republican leadership to bring the minimum wage to the floor of the House and they have finally agreed to do that. But only last night did we discover, as they seek to bring the minimum wage to the House for a vote, that they also will make in order amendments that will take away the benefits of the minimum wage and repeal the benefits of the minimum wage for up to 10 million working Americans in this country who today work in some of the toughest occupations.
These are the people who work in the fields that bring the food to our table. These are the people who wait on us when we go to dinner, when we go out to breakfast and when we go to lunch, who work long hours. These are the people who work in sweatshops making our garments.
These are the people who will find, because of the nature of their employment, that they must move from job to job all of the time as the tasks change. They do not lack skills, they do not lack the ability or the desire to work, what they lack is the protection of the minimum wage if the Goodling amendment passes.
So while we see the Republicans trying to pretend they are offering the minimum wage, what we see, in fact, is they have structured the debate, they have structured the rule, and they have structured the amendments to this bill so that, in fact, they will try to uncover tens of millions of Americans from the opportunity to earn a minimum wage.
These are Americans who have chosen to go to work, who go to work every day, who end up at the end of the year poor, who end up at the end of the year eligible for food stamps, who end up at the end of the year eligible for housing, who end up at the end of the year eligible for the earned income tax credit. Why? Because through their labor they cannot earn a living wage. And now the Republicans seek to take that benefit away from up to 10 million Americans.
These are women who are working hard to support their families, these are single parents who are working hard to support their families, these are students working while they are in school, while they are in high school and while in college, working 20, 30 hours a week. And the Republicans would deny them the benefits of the minimum wage. They would do it cleverly. They would do it cleverly by rolling back the benefits and the guaranties they have today that when they go to work they would get the minimum wage.
The Goodling amendment must be rejected. We must have a clean up-or-
down vote on the minimum wage. It must be increased. These hard-working Americans who have chosen work over welfare are entitled to the benefits of their labor. We should no longer continue to subsidize those employers who simply choose not to pay the minimum wage.
We just voted on an amendment that was to take care of the increased cost, if there are any, to paying the minimum wage for small businesses. Those were the tax breaks that this House just overwhelmingly passed. But now what are they doing? Now they are trying to provide low-income labor to those very same employers. We should reject the Goodling amendment.
Mr. GOODLING. Mr. Speaker, I yield myself 1 minute.
The first statement I would like to make is that there were 2 years under the President's leadership when had a majority in the House and the Senate that he only mentioned the minimum wage during that entire time either in committee or by saying that raising the minimum wage does not help the working poor. So I want to make that clear.
Second thing I want to make clear is, the $500,000 exemption has been something that has been a bipartisan effort for a long, long time. We have minimum wage exemptions. We have exemptions for small businesses in practically every piece of legislation, whether it is civil rights, whatever it may be. Those exemptions are in there.
And I would point out again that Mr. Espy offered almost the same piece legislation. It was cosponsored by 60 Democrats and 90 Republicans, some sitting in the audience right now who cosponsored it. I improved on it in making very, very sure, as a matter of fact, that it would not be retroactive; that we could not take money from those who presently had the money and are making those kind of wages. So I want to make very clear at this point.
Mr. CLAY. Mr. Speaker, I yield 30 seconds to the gentleman from California [Mr. Miller].
Mr. MILLER of California. Mr. Speaker, what should be made very clear is that after years of expanding the coverage of the minimum wage to hard working Americans in agriculture and sweatshops and other employment, what in fact we are now doing is rolling back and repealing the benefits of the minimum wage.
So the gentleman is the first author of a minimum wage bill that is rolling back the benefits to people who are currently covered. All they have to do now is change their job and they lose the benefits of the minimum wage under his chairmanship.
So the hallmark of this Republican Congress is they are uncovering hard working Americans who currently earn the minimum wage from the coverage of the minimum wage protection.
Mr. GOODLING. Mr. Speaker, I yield 2 minutes to the gentlewoman from Kansas [Mrs. Meyers].
Mrs. MEYERS of Kansas. Mr. Speaker, H.R. 1227 amends the Portal-to-
Portal Act to allow employees to use company vehicles for traveling back and forth to work. It is a simple bill, and frankly, addresses an issue which the Congress of the United States should not have to be involved in. Unfortunately, the Congress is increasingly forced to become involved in activities which historically have been left to employers and employees to decide. Misguided and confusing interpretations of current law issued by the Department of Labor have made this necessary.
Many industries throughout the country provide company vehicles to employees for use during working hours, and allow the employee to use the vehicle to commute to and from work. This longstanding practice was threatened in 1994 when the Department of Labor decided that employees generally must be paid for the time spent commuting between home and the jobsite in employer-owned vehicles. Prior to this action, the long-
settled rule under the Portal-to-Portal Act had been that commuting time, whether in a personal or company vehicle, was not counted as hours worked. So, for many years, this was a nonissue. But after the Department's action--which it later rescinded and replaced with another opinion--confusion and lawsuits reign, and employees lose.
Employees benefit by using a company vehicle to commute to and from work. It not only saves them time, but saves wear and tear on their own car, or allows another family member use of the car. Employees did not, and still do not, expect to be paid for driving back and forth to work.
This bill ensures that employers who use company vehicles to commute to and from work are not ``on the clock'' so long as there is an agreement between the employer and the employee, and the commute is within a normal commuting distance. I urge all of my colleagues to support this commonsense measure.
{time} 2045
Mr. CLAY. Mr. Speaker, I yield 3 minutes to the gentleman from New York Mr. [Owens].
(Mr. OWENS asked and was given permission to revise and extend his remarks.)
Mr. OWENS. Mr. Speaker, this Employee Commuting Act is a cheap device being utilized to sabotage the effort to increase the minimum wage by 90 cents over a 2-year period. This Employee Commuting Act is one more attack on American working families. This is guerrilla warfare. It is an ambush of the workers. This bill forces workers to do work for which they are not paid. This bill allows employers to coerce employees into agreements to work without getting paid.
The number of workers who drive vehicles to and from work that are owned by the company may be relatively small, but the principle here, the principle at stake here is monumental when you consider the implications of forcing people to work without getting paid.
This act pilfers the wages of workers. This is a mandate for picking the pockets of defenseless workers.
Against this petty thievery, Democrats must rise again to defend American working families. For some reason, during this whole year, the Republicans have waged an onslaught on working families. they have attacked OSHA for the safety of workers. They have tried to establish teams that would replace unions. They have attacked the National Labor Relations Board. They have attacked Davis-Bacon.
For some reason the Republicans are determined to wipe out the gains that workers have made over the last 50 years. This is just one of many attacks. But this is a side attack, a guerrilla attack to pick the pockets. It is very petty but it is very damaging in terms of the precedent that it sets. If you let employers get away with forcing workers to work without getting paid on this occasion, on this particular set of circumstances, then you will do it again and again.
The minimum wage is what they really want to get. They want to cloud the issue, confuse the American public. A mere 90 cents increase in the minimum wage over a 2-year period, that is what is at stake here. The Republicans want to declare war on working families, in this case when it does not even involve the budget of the Government.
The Government will not be out one penny as a result of increasing the minimum wage. The minimum wage increase will not lead to a decrease in the number of jobs. The minimum wage has been increased in the State of New Jersey, and their industry has gone forward. They have more employment than ever before. They are prospering from the fact that they paying higher wages. Just as Social Security did not destroy the economy, just as the creation of the minimum wage bill, minimum wage act in the first place did not destroy the economy, just as all of the other benefits that workers have come to enjoy have not destroyed the economy but instead created a consumer class, a working class unlike anywhere else in the world, that has made our Nation prosper, the minimum wage will not hurt the economy.
The minimum wage will help working people on the bottom who very much need a raise. Minimum wage will help those people that you are throwing off welfare into work because they will have an opportunity to work for a decent wage.
America needs a raise and it needs it right now. We do not need these kinds of actions. The portal to portal bill takes wages out of the pockets of workers. I urge Members to reject this Employee Flexibility Act.
Mr. CLAY. Mr. Speaker, I yield 1 minute to the gentlewoman from Georgia [Ms. McKinney].
Ms. McKINNEY. Mr. Speaker, I take this opportunity tonight to oppose the Gingrich-Goodling amendment. I suppose we should have expected that the Republican leadership would not allow a vote to increase the minimum wage without first giving away the farm. The Gingrich-Goodling amendment, Mr. Speaker, would deny nearly 10 million American workers the right to earn the minimum wage and overtime pay, even though these workers have those rights today. Only in a Republican controlled Congress would we vote to increase the minimum wage 1 minute, then make 10 million workers ineligible for it in the next minute.
This amendment, Mr. Speaker, is little more than a cruel and cynical joke made at the expense of millions of working families. I urge my colleagues who support the minimum wage increase to oppose this antiworker amendment. From folks who oppose even the concept of a minimum wage, we really should not expect any better.
Mr. CLAY. Mr. Speaker, I yield 3 minutes to the gentleman from Texas
[Mr. Gene Green].
(Mr. GENE GREEN of Texas asked and was given permission to revise and extend his remarks.)
Mr. GENE GREEN of Texas. Mr. Speaker, our chairman is correct that we are debating H.R. 1227. That is the vehicle that is being used tonight and tomorrow to debate the minimum wage increase. After months of blocking Democratic attempts to vote on raising the minimum wage, Republicans have finally allowed a vote on the issue. But this move is not really intended to help those hard-working Americans. Republicans will attach this minimum wage increase to a proposal that is nothing but an attempt to satisfy special interest groups who join them in the months-long battle against raising the minimum wage.
The 80 percent of the American people who support a minimum wage need to know that the legislative vehicle that is being used today will exempt millions of hard-working people from the minimum wage and overtime pay. That is right, over 10 million people will not be eligible for a minimum wage increase. This is the Washington way of giving it to you with one hand and taking it away with the other.
Mr. Speaker, it is obvious that the Republicans really have no interest in providing working Americans the opportunity of a living wage. We should not allow this sham, this gimmick, this fraud on these lowest paid hard-working American workers. Republicans do not care that the minimum wage has been on a fairly steady decline for the past 15 years. Today the minimum wage has fallen 45 cents in real value since the last increase in 1991. Five years ago there was the last minimum wage increase, and yet we have not seen an increase, and now we see this sham tonight.
Americans know that the real families exist on the minimum wage. It is hard to get by, when working full time does not even put enough money to stay off welfare. You have to earn money in your pocketbook to put food on the table. That is why Americans, 80 percent support an increase in the minimum wage. Republicans have a golden opportunity to give these hard-working Americans a clean minimum wage increase, but not if we adopt the Goodling amendment.
Mr. Speaker, I hope that we will have a clean minimum wage increase that will give these hard-working people an increase without exempting 10 million people from the minimum wage and also from the overtime protections that they have now.
Mr. GOODLING. Mr. Speaker, I yield 2 minutes to the gentleman from Indiana [Mr. McIntosh].
Mr. McINTOSH. Mr. Speaker, I rise in opposition to the effort to mandate a raise of the minimum wage because I think this effort, although it appears to be well-intended, ignores what I refer to as the victims of minimum wage folly. In my subcommittee, we held hearings last week in which we heard from experts, economists and real people who will be living with this law. I will insert the testimony into the Record.
Let me introduce you to two of the victims of this minimum wage folly. One of them is a woman named Melody Rane and her family. They have a family-owned Burger King in Eureka, CA. She will have to let off four full-time workers and eight part-time workers if we mandate an increase in the minimum wage.
Most of her workers do not stay on minimum wage. They come in untrained. They start at minimum wage. And within 6 months are making much, much more than minimum wage. But because of our mandate, she will have to reduce her employment, have fewer opportunities for some of the most vulnerable members of our society.
A second such person is at the far end, his name is Don Baisch. Don is pictured with his daughter Maya. Three years ago Don was on welfare. He did not have a job. Melody gave him his first job at her Burger King. He started out on minimum wage. Now 3 years later, Don is a working dad, supporting his daughter Maya as a manager in Melody's store.
He came and said:
Mr. Congressman, please do not raise the minimum wage because there are going to be future people just like me who will not have a chance to get off welfare. You think you may be doing the right thing, but for them it is wrong, and it will hurt them and deprive them of a chance to have a job.
We need to do what is right for working men and women. Tomorrow I will discuss a better way, a minimum wage tax cut. Unfortunately, we cannot vote on it, but let us not harm these people.
Mr. Speaker, I include for the Record the following information:
Testimony Before the Subcommittee on National Economic Growth, Natural
Resources, and Regulatory Affairs--Tuesday, May 14, 1996
statement of melody rane, Burger King Franchise
Good morning. My name is Melody Rane and I am the mother of four children and, together with my husband, Jay, am the owner of two Burger King restaurants in Eureka and McKinleyville, California. I'd like to thank the Subcommittee for the opportunity to express, as a small business person, how the proposed increase in the minimum wage would affect our business and, most importantly, the young people we employ.
I have provided the Subcommittee with a written calculation of what the actual cost of the proposed minimum wage increase would be to our business. As you can see, our labor costs would increase by over $100,000.00 per year. This is more than we took together as a salary from our business last year, before taxes. Clearly, we simply could not absorb this loss, so would be faced with the following choices: 1) increase our prices (which would be against our better judgment, since reducing our Whopper to $.99 and selling meal combos three years ago has increased our sales by 30% and our profits by 15%); 2) lay off employees; or 3) increase prices moderately, so we can retain business, while laying off employees. The logical choice, and the one we would plan on executing, is the third. My guess is that most business owners would do the same, which would cause inflation--and then what good have we done anyone?
My biggest concern--and the reason I am here today--is the jobs for our youth. As a mother of three teenage sons, I think it is very important for these young people to experience working at a job where they can learn the importance of being productive members of our society. As you can see from my calculation, a lot of jobs would be lost from a minimum wage increase, just in our franchise alone. Our solution will be to raise prices for half of the increase and lay off workers for the other half. I will have to lay off a total of 4 full time workers or 8 part time workers. There are about 6,000 franchised Burger King restaurants in the United States, which would equate to an estimated 24,000 full time jobs or 48,000 part time jobs. We would be forced to layoff teenagers mostly, as they are almost always inexperienced and require more of the Manager's time to teach them good work ethics. Only the most productive and hard working people would survive the cut, because we would have to give the same service with less people.
When we first started our business 15 years ago, it took 16 to 18 people to work a busy Saturday lunch rush. Now, we use 12 to 14. With the last minimum wage increase, we went to self-service drinks. There is no avoiding the fact that a further minimum wage increase would mean even fewer job opportunities in our restaurants.
My point is that the minimum wage may be $4.25, but it is only a starting wage. My average hourly rate is $5.10 per hour today, and my fellow franchisees around the country also have comparable average wages, some much higher. Why not leave what's working alone and let the market drive the wages? A large number of the franchisees can't even get employees to come and work for $6.00 an hour, because often we are competing with the welfare system. What incentive does a person have to work a minimum wage job, whether it is at
$4.25 an hour or $5.25 an hour, if they can make two or three times as much on welfare and not work at all?
I have asked an employee of ours to join me here and tell you his story. He was on welfare when he started working for us at the minimum wage. Now, he's a Manager for us making almost $20,000 a year. How many people will not get the opportunity he did if jobs are cut? In fact, every one of our managers started with us as an hourly employee with no experience making the minimum wage. Who stays at the minimum wage all their life?
It upsets us to see the media and others portraying small business owners as heartless people who care nothing about employees. I am very proud of the hundreds of young people who have worked for us through the years that go on and get bigger and better jobs. The real satisfaction we get is when they come back and thank us for the lessons we taught them about working, and how we made a difference in their lives.
In closing, I would just like to say that our industry serves a valuable purpose--we are the first rung on the ladder for many workers. We take pride in seeing them progress to the next, and the next, whether it be with us or with someone else.
Thank you.
statement of don baisch, manager, eureka burger king restaurant
I was hired to work at the Eureka Burger King in May of 1993. I started at $4.25 an hour and after a few weeks I had proven myself to the management and was given a $.50 raise. Because of a rocky relationship with my wife, I quit and was rehired a few times, but when I found out that we were going to have a baby, I started getting serious about my job.
The manager wanted me to work more hours, but because I was on welfare and receiving financial assistance, my case worker told me that until the baby was born I could only work 25 hours a week or I would lose some of my benefits. After my daughter was born in March of 1994, I was allowed to work full time and I accepted a promotion to Crew Leader, starting at $5.25 an hour. A Crew Leader helps the manager on duty by making sure all the food prep is done, the breaks are all given out and that all cleaning list and check lists are done.
About 8 months after I became a Crew Leader I was offered an Assistant Manager job. I talked to my case worker to see what benefits I would lose, and she said that we would lose all of our benefits. Furthermore, she said that if the job didn't work out, we would have to reapply for all of our benefits again, which could take months. That did it for my wife--she refused to let me take the job. A few months later, in March of 1995, my wife and I split up and the Assistant Manager job was offered to me again. This time I took it.
Jay and Melody had to start me out at $1400.00 a month
(this was $200.00 more a month than they normally started inexperienced managers) just to match my Crew Leader pay and what I was receiving from welfare. The welfare system, at least in Humboldt County, discourages you from tying to get ahead. In fact, it discourages couples from getting married, because you can get more benefits if you are single, and the case workers tell you that. There needs to be a better way. They should gradually take it away, until you are finally on your own.
Jay and Melody, the managers and co-workers at Burger King believed in me and saw what I could not see anymore in myself, and I am very thankful for their help. Thanks to a minimum wage job opportunity, I am completely off of welfare now, and I have a self-esteem and pride again. I hope you think carefully about increasing the minimum wage, because it will provide less opportunities for people like me to turn their lives around.
APRIL 1-30 PAYROLLS
(1 High Volume Store, 1 Average Volume Store)
------------------------------------------------------------------------
Gross Avg. Hourly
Hours (a) Hourly Pay Wage
(b) (ba)
------------------------------------------------------------------------
Eureka............................ 4,276 $21,787 $5.09 McKinleyville \1\................. 3,314 $16,228 $4.89
------------------------------------------------------------------------
\1\ The McKinleyville store has a lower average hourly wage because it just opened in Oct. of 95. As the employees gain experience and get more raises this number will catch up with the Eureka store.
After a minimum wage increase of $1.00 per hour:
Eureka--4,276 hrs$6.09=$26,041 an increase of $4,254.00 a mo.
McKinleyville--3,314 hrs$5.89=$19,519 an increase of
$3,291.00 a mo.
Total Payroll Increase for the month=$7,545.00.
Wage Increase12=$90,540.
Added Employer FICA=$6,926 (7.65%).
Added Workers Comp=$3,395 (3.75%).
Total W/Added Taxes $100,861 and Insurance.
questions for melody rane
1. Roughly, how many people have you given a start with a minimum wage job?
2. What do you think will happen to those employees you will have to lay off if there is a minimum wage increase?
3. Do you expect other fast food chains around the country will have to do the same? [If so, your estimate that 24,000 full time employees or 48,000 part time employees will be laid off in Burger King restaurants can be multiplied many times for a grand total job loss in the fast food industry.]
questions for don baisch
1. Have you ever regretted taking your job at Burger King and getting off welfare benefits?
2. Do you believe welfare case workers discourage others from taking jobs so they can keep their benefits, like they did for you?
3. Do you believe that minimum wage jobs offer other people the same opportunities for success that your job at Burger King offered you?
The Minimum Wage Trap
(By Bruce Bartlett)
President Clinton is asking Congress to raise the minimum wage by 90 cents over two years to $5.15 per hour, a 21% increase. In doing so, the president has challenged the widespread view among economists that an increase in the minimum wage will reduce jobs.
In 1981, the congressionally mandated Minimum Wage Study Commission concluded that a 10% increase in the minimum wage reduced teenage employment by between 1% and 3%. This suggests that between 130,000 and 400,000 jobs would be lost if the Clinton plan is approved by Congress. This estimate is confirmed in two more recent studies, by David Neumark of Michigan State and William Wascher of the Federal Reserve Board, and by Kevin Murphy of the University of Chicago and Donald Deere and Finis Welch, both of Texas A&M.
The Clinton administration counters by referring to the recent work of economists David Card and Alan Krueger, both of Princeton. Their studies of fast food restaurant employment in New Jersey and California after those states increased their state minimum wages found no evidence of job loss.
flawed data
However, flaws in the Card-Krueger data cast serious doubt on the validity of their conclusions. In a paper published by the National Bureau of Economic Research, Messrs. Neumark and Wascher reexamined the Card-Krueger data, which originally came from telephone surveys. Using payroll records from a sample of the same New Jersey and Pennsylvania restaurants, Messrs. Neumark and Washer found that employment had not risen after an increase in the minimum wage, as Messrs. Card and Krueger had claimed, but in fact had fallen.
A review of Mr. Card's study of California by Lowell Taylor of Carnegie Mellon University found that the state minimum wage increase had a major negative effect in low-wage counties and for retail establishments generally. Thus Nobel Prize-winning economist Gary Becker of the University of Chicago concluded that ``the Card-Krueger studies are flawed and cannot justify going against the accumulated evidence from many past and present studies that find sizable negative effects of higher minimums on employment.''
The fact is that virtually every major study that has ever been done has found significant job losses from an increase in the minimum wage, with the rare exception of those done by Messrs: Card and Krueger. (Mr. Krueger formerly served as chief economist for the Labor Department in the Clinton administration.) A survey of earlier studies by the General Accounting Office in 1983, for example, ``found virtually total agreement that employment is lower than it would have been if no minimum wage existed.''
But even if the minimum wage had no effect on overall employment, there are still strong arguments against raising it. First, it is important to understand that the impact of the minimum wage is not uniform. For 98.2% of wage and salary workers, there is no impact at all, because they either already earn more than the minimum or are not covered by it. However, for workers in low-wage industries, those without skills, members of minority groups and those living in areas of the country where wages tend to be lower, the impact can be severe. This is why economists have always found that the primary impact of the minimum wage has been on black teenagers.
In 1948, when the minimum wage covered a much smaller portion of the labor force, the unemployment rate for black males age 16 and 17 was just 9.4%, while the comparable unemployment rate for whites was 10.2%. In 1995, unemployment among black teenage males was 37.1%, while the unemployment rate for white teenage males was 15.6%. Moreover, the unemployment rate for black teenage males has tended to rise and fall with changes in the real minimum wage.
But current unemployment is just a part of the long-term price that entry-level workers of all races pay for the minimum wage. A number of studies have shown that increases in the minimum wage lead employers to cut back on both work hours and training. When combined with the loss of job opportunities, this means that many youths, especially among minorities, are prevented from reaching the first rung on the ladder of success, with consequences that can last a lifetime.
When people cannot get legitimate jobs, it is not surprising that they turn to crime and the underground economy. Studies by Massanori Hashimoto of Ohio State and Liad Phillips of the University of California, Santa Barbara, both show that increases in the minimum wage contribute to teenage crime. And a study by William Beranek of the University of Georgia found that the minimum wage encourages employment of illegal aliens, who are unlikely to report any violations of the Fair Labor Standards Act to the Labor Department.
Research also shows that the minimum wage is a significant factor in welfare dependency. A recent study by Peter Brandon of the University of Wisconsin, for example, examined welfare rates in states that increased their minimum wages in the 1980s with those that did not. In those that did, the average time on welfare was 44% longer than in states that did not. This is largely due to reduced employment opportunities for welfare mothers. In states not raising the minimum wage, half of welfare mothers worked during the years surveyed, while in states that raised the minimum wage only 40% reported working.
Intuitively, one would have expected a higher minimum wage to make work more rewarding for those on welfare. However, the interaction of the welfare and tax systems means that some working people are actually worse off after an increase in the minimum wage. Economist Carlos Bonilla of the Employment Policies Institute, an industry-funded group on Washington, D.C., found a dramatic example of this in California after its minimum wage rose to $4.25 from $3.35. After accounting for the phase-out of Aid to Families With Dependent Children, Medicaid and food stamps, and for federal, state and local taxes, Mr. Bonilla found that a single parent earning the minimum wage was $1,800 per year worse off after the increase.
Finally, the latest research shows that increases in the minimum wage encourage high school students to drop out, enticed by the lure of higher pay for unskilled work. This has the effect of reducing their lifetime earnings and displacing lower-skilled older workers at the same time.
little impact
Given these kinds of effects, it is not surprising, therefore, that the minimum wage, has almost no broad impact on poverty or the incomes of the poor. Although some poor people are better off because they get higher wages, others are worse off because they lose their jobs. Thus one study found that the 22% increase in the minimum wage in 1976 added just $200 million to the aggregate income of those in the lowest 10% of the income distribution. Indeed, much of the benefit of the minimum wage actually goes to the well-off, whose children get paid more for part-time work.
Moreover, although proponents of a high minimum wage often talk about the difficulty of supporting a family on the minimum wage, only a very small number of workers earning the minimum wage actually do so. In 1993 only 22,000 men and 191,000 women nationwide maintained families on a minimum wage job, according to the Bureau of Labor Statistics. According to BLS data for 1985, 37% of minimum-wage workers were teenagers, probably living at home, and 59% were age 24 or younger. About 17% of minimum-wage workers are wives, and thus likely to be secondary earners, and 66% only work part time. These include students, the elderly with pension or Social Security income, and those simply looking for a little extra cash.
The case against the minimum wage is strong. In fact, the minimum wage should be abolished. Even the liberal New York Times has said so. As the headline on its Jan. 14, 1987, lead editorial put it: ``The Right Minimum Wage: $0.00.'' Indeed, according to Robert Meyer of the University of Chicago and David Wise of Harvard, abolition would actually increase the aggregate income of youth in this country. Raising the minimum wage simply moves us further in the wrong direction.
Mr. CLAY. Mr. Speaker, I yield 2 minutes to the gentlewoman from North Carolina [Mrs. Clayton].
Mrs. CLAYTON. Mr. Speaker, one is asked, why do we need a minimum wage? I just heard the reference to victims. I gather these people feel that they need the minimum wage, and 80 percent of the American people feel they need to increase the minimum wage.
First you need to increase the minimum wage because it is the fair thing to do. It is indeed fair to say that those who are employed at the lowest level are also employed at a livable wage. It says something about our economy.
Why is a livable wage needed? Well, it is needed to provide the very basic essentials of living: a shelter, food on the table, clean clothes, being able to take care of medical expenses, transportation, all those things that a human being needs to exist.
Again, we heard reference to the teenagers who are on the minimum wage. I would suggest to you there indeed are teenagers who are on the minimum wage, but they are supplementing their family's income. Many of them are working their way through college. Indeed, they have a right, as I have suggested to you, as the adults have in making a livable wage.
The adults are mostly women, single women heads of households who have a sole responsibility for their families. So who will be helped? A lot of people will be helped, if indeed we raise the minimum wage.
What are the Republicans doing? What is their answer to America's cry that we want to be fair, that we want to have an economy that says the least among us should have a livable wage and that the minimum wage should be increased. They put a minimum wage bill before this House, but yet they encumber it with the amendment that the gentleman from Pennsylvania [Mr. Goodling] has.
Indeed, this is a unique way to offer something by offering it and taking it back. Indeed, now more than 10 million people who were covered under the 1991 increase in the minimum wage will not now be covered. In fact, the current law covers at least 10 million people who will not be covered. This is unfair, Mr. Speaker. We should reject the Goodling amendment.
The SPEAKER pro tempore (Mr. Walker). The gentleman from Missouri
[Mr. Clay] has 1\1/2\ minutes remaining, and the gentleman from Pennsylvania [Mr. Goodling] has 2\3/4\ minutes remaining. The gentleman from Pennsylvania [Mr. Goodling] has the right to close the initial debate.
Mr. GOODLING. Mr. Speaker, I yield 1 minute to the gentleman from Illinois [Mr. Fawell].
Mr. FAWELL. Mr. Speaker, I think it is too bad that we have what I would call extremism here as we try to talk about something I hope more rationally. When we talk about the fact that the Goodling amendment, for instance, is going to cause some 10 million people, for instance, to lose coverage under minimum wage, I can only shake my head.
I would refer my colleagues to the fact that over 200 Members of this Congress, including being led by Mike Espy, a member of the other side of the aisle, a short time ago pointed out that before the passage of the minimum wage law back in 1989, there was $362,500 annually, that is, businesses grossing less than $362,500 were granted exemptions. That was extended and increased to $500,000 at that time, but there was a mistake made. Mike Espy pointed out the mistake that was made.
Mr. CLAY. Mr. Speaker, I yield the balance of my time to the gentleman from New York [Mr. Engel].
The SPEAKER pro tempore. The gentleman from New York, Mr. Engel, is recognized for 1\1/2\ minutes.
Mr. ENGEL. Mr. Speaker, I want to say there is no clearer issue in my opinion that defines the difference between Democrats and Republicans that raising the minimum wage.
It has been clear. We on the Democratic side have tried for months and months to try to get a clean minimum wage raise, a lousy 90 cents an hour from $4.25 to $5.15. What have we gotten from the majority, the Republicans from the other side of the aisle? We have gotten stalling, delaying, all kinds of tactics.
Now we finally get a bill and we have all kinds of things to hurt workers rather than to help workers, to exempt people from the minimum wage, all kinds of tricks and all kinds of nonsense.
We asked for a clean minimum wage bill, a clean bill that would clearly say that the minimum wage ought to be raised from $4.25 to
$5.15 an hour. Eighty percent of the American people agree that the minimum wage ought to be raised, including 70 percent of Republicans. But the Republican leadership has been against it. And they have not allowed us to have a clean up or down vote on the floor.
{time} 2100
What could be easier or more simple than a clean up or down vote on whether the minimum wage should be raised 90 cents an hour? People have said here time and time again that the buying power of the minimum wage is at a 40-year low. All we are saying is that people who are working, people who are working people, they are not on welfare, they are not looking for a handout; they are working people, they deserve to be paid at a higher level.
We should reject the amendments, and we should have a clean vote on the minimum wage.
Mr. GOODLING. Mr. Speaker, I yield myself the balance of my time.
The SPEAKER pro tempore (Mr. Walker). The gentleman from Pennsylvania
[Mr. Goodling] is recognized for 1\1/4\ minutes.
Mr. GOODLING. Mr. Speaker, tonight, of course, we were talking about an Employees Commuting Flexibility Act which really helps working people. I can remember as a superintendent I said to the school board,
``Give me transportation, give me a car to go back and forth to work. That way Uncle Sam can't take any increase I get away from me because I will have transportation,'' and that takes care of a big expense for many people.
So that is what we are talking about tonight.
I was amazed. It sounded like we had a bidding war going on over there. We had 5 million, 10 million, we are up to 30 million. I guess tomorrow it will even get higher.
Mr. Speaker, I would hope that tomorrow we give a little consideration to the fact that the Congressional Budget Office has said that a 90-cent increase could produce unemployment losses from 100,000 to 500,000 jobs. Now, we better think about that. These are the most vulnerable people we have in our society, and so I would hope that when we get back tomorrow on track that we will consider those 100,000 to 500,000 so that we consider all Americans.
As I said, they are the most vulnerable, and when we move in to try to create more jobs, it is going to be small businesses that are going to promote those jobs and create those jobs. So we better think seriously about that.
The SPEAKER pro tempore. All time in this part of the debate has expired. Pursuant to the order of the House of today, further consideration of the bill will be postponed until tomorrow.
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