USCCB - (SDWP) - Minimum Wage

Minimum Wage

February 2000

The Issue

The minimum wage is, once again, a major topic of conversation in Washington, D.C. This time however, the tenor of the debate can be summarized in the words of the bishops of 1919: "we are glad to note that there is no longer any serious objection urged by impartial persons against the legal minimum wage." Both political parties, Democrats and Republicans, have offered their version of a minimum wage increase. The Republicans, holding majorities in both Houses, hope to 1) phase in a $1 increase over 3 years; and 2) combine unrelated tax cuts for businesses and higher income people. The Democrats on the other hand hope to raise the minimum wage $1 over two years with smaller tax cuts.

The value of the minimum wage still lags far behind "a living wage" even after the increases earlier in this decade. The minimum wage of $5.15 an hour today would have to be $6.53 an hour to have the same purchasing power it had in 1979. Increasing the minimum wage could be one significant way for society to give low-income workers some share of our ongoing economic growth.

Of the 11 million workers who would benefit from an increase:

Minimum wage workers are disproportionately women. They are often single-heads of households with children. They are teacher's aides, child care providers, and eldercare workers. They clean office buildings in countless communities across the country. They are the people moving from welfare to work. Yet, working 40 hours a week, 52 weeks a year, they earn $10,712 at the current minimum wage -- $2,300 below the poverty level for a family of three. No one who works for a living should have to live in poverty.

Congressional Activity

The Senate Republicans were successful in amending the Bankruptcy bill (S 625) to increase the minimum wage $1 over 28 months. The amendment also included a series of tax cuts ostensibly to offset the effects of a higher minimum wage on small businesses. However, not only do the minimum wage provisions of the Bankruptcy bill fail to improve the wages of low wage workers overtime, the tax reductions would benefit high-income individuals who do not work for small businesses.

The series of tax cuts would likely 1) lead to reductions in employer-provided pensions; 2) encourage some small business owners to drop group coverage (or not to institute it in the first place); and 3) would relax limitations on the extent to which business could deduct a "three-martini lunch."

The Bankruptcy bill will now go to a House-Senate Conference Committee to reconcile the two versions of the bill. House Republican Leadership has indicated that they may accept the Senate minimum wage language. President Clinton has said he will veto legislation containing these provisions.

USCC Policy

Work has a special place in Catholic social thought: it is more than just a job, it is a reflection of human dignity and a way to contribute to the common good. Most importantly, it is the ordinary way people meet their material needs and community obligations. In Catholic teaching, the principle of a living wage is integral to our understanding of human work. Wages must be adequate for workers to provide for themselves and their families in dignity. While the minimum wage is not a living wage, the Church has supported increasing the minimum wage over the decades. The minimum wage needs to be raised to help restore its purchasing power, not just for the goods and services one can buy but for the self-esteem and self-worth it affords the individual.

USCC Position and Strategy

The United States Catholic Conference supports legislation (S192 and HR 325) introduced that would increase the minimum wage by one dollar ($1.00) over the next two years -- bringing the level to $6.15 an hour. The Catholic Conference is urging Congress to raise the minimum wage in a timely and meaningful way!

More Information: Thom Shellabarger at the USCC, 202.541.3189, tshellabarger@usccb.org