Letter to the U.S. Senate Urging the Vote Against Senator Kennedy's Amendment to the Class Action Fairness Act of 2004

July 6, 2004

TO THE MEMBERS OF THE UNITED STATES SENATE:

It is our understanding that Senator Kennedy will offer an amendment to the Class Action Fairness Act of 2004 (S. 2062) that would increase the Federal minimum wage by $1.85 per hour. On behalf of the U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, and in every industry sector and region, I urge you to vote against this amendment.

It is obviously unwise to raise the minimum wage $1.85 per hour, an increase of more than thirty-five percent, at a time when our economy has only recently begun to recover and create new jobs. A study by the Employment Policies Institute (Job Loss in a Booming Economy, 2nd Edition) suggests that, as a result of the 1996 wage increase of only $.50 an hour, 645,000 entry-level jobs were destroyed, despite the robust economy at that time. An increase now of $1.85 an hour—over three times that of the 1996 increase—would eliminate entry-level jobs, stunt new job growth, and harm small employers, who will shoulder the added costs of this new mandate.

Moreover, statistics show that increases in the minimum wage do little to help the intended beneficiaries—low-income families. According to the Employment Policy Foundation, less than one percent (0.9%) of current minimum wage earners are in families with a total family income of $20,000 or less.

In short, the more than thirty-five percent increase in the minimum wage proposed by Senator Kennedy would be damaging to businesses, particularly small ones, and would impair the creation of entry-level jobs for low skilled employees. For this reason, we will consider including votes on or in relation to the Kennedy minimum wage amendment as key votes in our annual How They Voted scorecard.

R. Bruce Josten
Executive Vice President, Government Affairs
U.S. Chamber of Commerce