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    Unbalanced Minimum Wage Bill Leaves Small Businesses and their Workers Unprotected

    01/08/2007

    The GOP ranking members on the House Ways and Means and Education and Labor Committees explain why the Democrat minimum wage bill is bad public policy:

    On Wednesday, the House is scheduled to consider legislation to increase the federal minimum wage from $5.15 per hour to $7.25 per hour over two years. Even though a balanced minimum wage bill - which increased the wage rate and included important considerations for small businesses and their workers - passed the House last summer with support from both sides of the aisle, this week an unbalanced, scaled-down bill will be thrust upon Members. And because of a provision tucked into the House Rules package approved last week, the bill will come to the floor without following regular order, without an opportunity for amendment, and without Members even having a chance to testify before the Rules Committee to express concerns about the unfair, closed, and heavy-handed process that will bring the measure to the floor.

    Even more troubling than the unprecedented manner in which this bill will be brought to the floor is the content of the bill itself. In fact, H.R. 2, the so-called "Fair Minimum Wage Act," is more noteworthy for what IS NOT in the bill than what IS in the bill. Exactly what's not in it? Considerations of any sort for small businesses and their workers. Such an exclusion is worthy of great concern.

    Small businesses are the backbone of our economy. They create two-thirds of the nation's new jobs. And they represent 98 percent of the new businesses in the United States. Small businesses and their workers are counting on Congress to consider how any minimum wage proposal would impact them. Last summer, Members of both parties did just that and threw their support behind a balanced package that would increase the minimum wage and provide significant protections for small businesses and their workers at the same time.

    The scaled-down proposal we are scheduled to debate on Wednesday does nothing of the sort. In fact, studies confirm that this proposal would saddle small businesses and their workers with a substantial burden and hurt precisely those it intends to help. For example, the Congressional Budget Office (CBO) estimates a minimum wage increase without considerations for small businesses and their workers would impose a $5-$7 billion unfunded mandate on those small businesses. As a result, according to the Hoover Institution, 20 percent - or 1.6 million - of the nation's minimum wage workforce could lose their jobs under this unbalanced plan. In fact, as many as one million workers in the restaurant industry alone could lose their jobs, according to a study reviewed by a Federal Reserve economist.

    We're not expressing concerns on behalf of small businesses and their workers simply because we want something to complain about. We're doing so because it's not only appropriate, but absolutely imperative. And we're not alone.

    Just last month, President Bush said of increasing the minimum wage, "I believe we should do it in a way that does not punish the millions of small businesses that are creating most of the new jobs in our country. So I support pairing it with targeted tax and regulatory relief to help these small businesses stay competitive and to help keep our economy growing. I look forward to working with Republicans and Democrats to help both small business owners and workers when Congress convenes in January."

    And Senate Majority Leader Harry Reid (D-NV) agrees as well, saying at a news conference last week, "If it takes adding small business tax cuts to get a minimum wage increase, we are going to do it."

    Simply put, backers of this unbalanced plan find themselves fighting a very lonely battle as they seek to pass a wage hike with no meaningful considerations for the shining stars of our nation's economy: small businesses and their workers. As this debate continues - not just this week but in the weeks to come - we're hopeful you and others will share and express these same concerns on behalf of small businesses in each and every one of our districts. We're confident that the final product we send to the President's desk can be far superior to the unbalanced and scaled-down measure scheduled for a House vote on Wednesday. For more information on our concerns and this issue, please contact the Education and Labor Committee at x5-4527 or the Ways & Means Committee at x5-4021.

    Sincerely,

    Howard P. "Buck" McKeon (R-CA)
    Education and Labor Committee

    Jim McCrery (R-LA)
    Ways & Means Committee