Statement of Administration Policy: S. 4 - Minimum Wage Restoration Act of 1989

(Senate)
(Kennedy (D) MA and nine others)

The Administration supports a responsible increase in the Federal minimum wage, but opposes S. 4, the "Minimum Wage Restoration Act of 1989," because of the adverse effects on job opportunities for the young, the low-skilled, and the disadvantaged that would result from its excessive increase in the minimum wage.

The President's senior advisers would recommend that he veto any legislation to increase the minimum wage that exceeded the following parameters:

• An increase of no more than 27 percent over three years, that is, to no more than $4.25 an hour;
  
  
• A meaningful training wage that would apply universally to all new hires, whether or not this is their first job, for six months at $3.35 (the current level of the minimum wage) together with enforcement provisions against displacing employees to hire new workers after six months;
  
  
• Liberalization of the current small business exemption (from $362,500 to $500,000) which would be extended to all businesses, not just retail and service establishments; and
  
  
• An increase in the "tip credit", from 40 percent to 50 percent.