The New York State Department of Labor evaluated the impact of State minimum wage legislation after the statutory hourly minimums in New York were raised in the retail trades to $1 in larger cities and to 90 cents in smaller communities, from previous minimums ranging from 65 to 75 cents an hour. The evaluation found that employers affected by the increased wage rates took a variety of actions to adjust to the higher costs. Weekly payroll savings of $79,000, nearly one-fourth of the total increases in wage costs, were achieved by reduced hours, layoffs and quits not replaced. Five percent of the stores affected by the wage increase also reported reduction in the hiring of extras. Altogether nearly 1,000 employees reportedly lost their jobs as a result of the minimum wage boost, and another 500 who quit were not replaced. Such legislation is primarily intended to help the low-wage worker— the unorganized, the rural, those in low-productivity work, the least skilled, the uneducated, the young, minority groups, and others. Yet it is precisely among those categories that the job-displacement impact of higher minimum wage rates falls most drastically. George Will in an editorial in this morning's Washington Post pointed to some of the fallacies of a "humanitarianism" based on increasing the statutory minimum wage. Will found that those who suffer the most are the "Nation's vulnerable," as they are the first to be displaced. The editorial writer lauds the Taft-Dominick approach, calling it an exception because it acknowledges that minimum wage legislation is harmful to many of the people who are supposed to benefit. In part, George Will states: Acting in its traditional role of tireless protector of the strong, the Senate is about to follow the House of Representatives in voting to increase unemployment among the nation's vulnerable workers-especially black teenagers. The Senate will do this in the name of humanitarianism as it votes another increase in the minimum wage. The Senate probably will adopt the House bill, as against the administration's proposals. The main arguments between the House and the administration concern whether coverage should be extended; how fast the minimum should rise to $2.20 per hour; and whether there should be a "youth differential," whereby anyone under 18 and full-time students could be paid 15 per cent less than the regular minimum wage. The House, reflecting the position of organized labor, wants to extend coverage to domestic and government workers. It wants to go to $2.20 one year quicker than the administration (by 1974) and rejects the "youth differential.” The administration's proposals are less toxic than those of the House. But the really striking and depressing thing in both wings of the Capitol is that so few politicans-Sens. Peter H. Dominick (R-Colo.) and Robert Taft, Jr. (R-Ohio) being honorable exceptions-acknowledge that minimum wage legislation usually is harmful to many of the people who are supposed to benefit. I suspect that one reason economics is known as the "dismal science" is that it, unlike other social sciences, is sufficiently rigorous to occasionally reach clear conclusions that can interfere with political desires. Certainly today there is a remarkable consensus among independent economists about five matters relevant to minimum wage legislation: Blacks suffer more than whites, and teenagers more than adults from sluggish job markets. Minimum wage legislation makes it harder for blacks and teenagers to find employment in good times, and harder to hold jobs when times are not good. White adult males benefit most from the effect of minimum wage legislation on lost job opportunities and increased job instability among blacks and teenagers. There are more poor people whose poverty derives from unemployment than from holding jobs that pay inadequate wages. While it is true that some workers are paid so poorly they must also draw welfare, it is equally true that raising the minimum wage will cause some of these people to become unemployed people on welfare. None of these points is surprising. Minimum wage laws hurt marginal workers because their skills are least productive and most easily dispensed with. That is why it does not pay to pay them much. Professor Friedman continues: Unquestionably, the most important effect of the minimum wage rate is unem ployment. So says Prof. Milton Friedman, one of this country's leading economists: Of all the laws on the statute books of this country, I believe that the minimum wage law probably does the Negroes the most harm. It is not intended to be an anti-Negro law but, in fact, it is. Let the opinions of Professor Friedman be discounted by some as coming from a very conservative economist, I wish to stress here that a growing and politically diverse number of economists are convinced that, by eliminating marginal job opportunities, the minimum wage is hurting people it is supposed to help, striking hardest at blacks and teenagers. What good does it do a black youth to know that an employer must pay him $1.60 an hour if the fact that he must be paid that amount is what keeps him from getting a job? This question comes from Paul Samuelson, a Nobel Prize winner for his contributions in economics and generally considered to be in the liberal camp. Legislators who really wish to help the poor may benefit from the following judgment of another liberal economist, James Tobin, a member of the Council of Economic Advisers under President Kennedy: People who lack the capacity to earn a decent living should be helped, but they will not be helped by minimum wage legislation, trade-union pressures or other devices which seek to compel employers to pay more than their work is worth. The likely outcome of such regulations is that the intended beneficiaries are not employed at all. The destructive impact of minimum wage legislation on employment among youth is stressed by a recent, well-regarded study by two Ohio University researchers, Douglas Adie and Gene L. Chapin. Their conclusion is as follows: We feel that the results of our study are unambiguous. Increases in the Federal minimum wage cause unemployment among teenagers; the effects tend to persist for considerable periods of time and seem to be strengthening as coverage is increased and as enforcement become more rigorous. Mr. President, the two most pressing problems in the American economy are unemployment and inflation. We all desperately seek solutions for these two problems. Raising the Federal minimum wage at this time is not part of the solutions we need; on the contrary, such a step will only aggravate the problem. There are approximately 5-million people unemployed in this country. The unemployment rate is twice that of the national average for blacks and other minorities. How are we going to help these people find jobs if we make it impossible for American business to hire them? We cannot force anybody to hire a disadvantaged worker if the output of that worker yields less than his cost. Mr. President, my experience with the minimum wage law goes back to my years as Governor of Wyoming. I recommended during the time I was Governor that we increase the minimum wage in Wyoming. Following my recommendation, that action was taken by the legislature. I began later to have misgivings as to the wisdom of my conclusion. I have since had the opportunity to visit with Daniel Patrick Moynihan several years ago when he was a domestic adviser to the President. Mr. Moynihan told the members of the Finance Committee that increasing the minimum wage was the greatest disservice that would be done to the people of this country with the fewest labor skills. In the words of editorial writer George Will, let us not in the name of humanitarianism vote to increase unemployment among the vulnerable and provide an impetus for continued inflation through enacting the committee bill. Mr. WILLIAMS. Mr. President, I yield back the remainder of my time. The PRESIDING OFFICER. The order is for the vote to come at 5 o'clock. It would take unanimous consent to alter that previous order. Mr. WILLIAMS. Mr. President, a parliamentary inquiry. The PRESIDING OFFICER. The Senator will state it. Mr. WILLIAMS. Mr. President, is that order for no later than 5, or precisely at 5? The PRESIDING OFFICER. At 5 o'clock. Mr. WILLIAMS. Mr. President, I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The second assistant legislative clerk proceeded to call the roll. Mr. ROBERT C. BYRD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. FAIR LABOR STANDARDS AMENDMENTS OF 1973 The Senate continued with the consideration of the bill (S. 1861) to amend the Fair Labor Standards Act of 1938, as amended, to extend its protection to additional employees, to raise the minimum wage to $2.20 an hour, and for other purposes. Mr. ROBERT C. BYRD. Mr. President, what is the pending business before the Senate? The PRESIDING OFFICER. The pending question is on agreeing to amendment No. 252, as modified to S. 1861. Mr. ROBERT C. BYRD. I thank the Chair. Mr. President, I suggest the absence of a quorum. The PRESIDING OFFICER. The clerk will call the roll. The legislative clerk proceeded to call the roll. Mr. ROBERT C. BYRD. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. The PRESIDING OFFICER. Without objection, it is so ordered. Pursuant to the previous order, the hour of 5 p.m. having arrived, the question is on agreeing to the amendment of the Senator from Texas (Mr. Tower), No. 252, as modified. On this question the yeas and nays have been ordered, and the clerk will call the roll. The legislative clerk called the roll. Mr. ROBERT C. BYRD. I announce that the Senator from Washington (Mr. Magnuson) is absent on official business. I also announce that the Senator from Mississippi (Mr. Stennis) is absent because of illness. I further announced that, if present and voting, the Senator from Washington (Mr. Magnuson) would vote "nay." Mr. GRIFFIN. I announce that the Senator from Kansas (Mr. Dole) is necessarily absent. The result was announced-yeas 19, nays 78, as follows: So Mr. Tower's amendment (No. 252) as modified, was rejected. Mr. WILLIAMS. Mr. President, I move that the Senate reconsider the vote by which the amendment was rejected. Mr. HUMPHREY. Mr. President, I move to lay that motion on the table. The motion to lay on the table was agreed to. (The text of Amdt. No. 252 (as modified) appears on p. 436.) AMENDMENT NO. 330 The PRESIDING OFFICER. Under the previous order, the senior Senator from Colorado (Mr. Dominick) is recognized for the purpose of calling up an amendment. Mr. DOMINICK. Mr. President, I am not certain whether, under the rule, I may modify the amendment I am about to call up, since the Senator from Ohio (Mr. Taft) has asked for the yeas and nays. I state that as a parliamentary inquiry. The PRESIDING OFFICER. Since the amendment has not been formally offered, the Senator has a right to modify it prior to offering it. Mr. DOMINICK. I thank the Chair. I send to the desk amendment No. 330 together with a modification and ask that it be read. The PRESIDING OFFICER. The amendment will be stated. The legislative clerk proceeded to read the amendment. Mr. DOMINICK. Mr. President, I ask that the further reading of the amendment be dispensed with and that the amendment be printed in the Record. The PRESIDING OFFICER. Without objection, it is so ordered. |