The 107th Congress failed to take action on a number of issues of great importance to low-income people. The war on terrorism, homeland security concerns, and now the impending war on Iraq have occupied Congress most of the last year, while many domestic programs have received little attention. Among them were continuing the extension of unemployment compensation and increasing the minimum wage.

UNEMPLOYMENT COMPENSATION

The unemployment compensation (UC) program is intended to provide partial replacement of wages for people who lose their jobs because of situations over which they have no control, such as the closing, moving or downsizing of a business. The benefits are funded in large part by a tax paid by employers to the state. States must cover jobs in firms where wages total $1,500 or more in any quarter, or where at least one worker is employed in each of 20 weeks in the current or prior year. Agencies of government do not pay the tax, although their workers are covered. Non-profit organizations are not required to pay the tax, but the state covers their workers in nonprofits with at least four workers in each of 20 weeks in the current or prior year.

To be eligible for assistance, workers must have had enough recent earnings to meet a state-established earnings requirement. Benefits are generally based on the claimant's average weekly earnings for the past year, and normally equal half of the worker's usual wage, up to a state-set maximum. In Fiscal Year 2001, the average benefit was $224 a week. Claimants can receive benefits for up to 26 weeks (30 in Massachusetts and Washington), or until they find a job, whichever comes first.

The basic UC program runs automatically and has clear guidelines. The problem area that requires periodic attention from Congress is the matter of extended benefits. In periods of high unemployment, benefits may be extended for an additional 13 weeks in most states. A few states with extremely high unemployment are allowed to provide up to 20 weeks of extended benefits beyond the normal 26 weeks. Prior to this year, Congress had acted four times since 1970 to trigger the extended benefits program, most recently in 1991.

In March of 2002 President Bush signed legislation that triggered a period of Temporary Extended Unemployment Compensation (TEUC) benefits for people whose regular benefits had expired in selected states with particularly high unemployment. To be eligible, an individual had to have filed an initial claim that was in effect during the week of March 15, 2001. Eligibility for that program has now expired.

Legislation introduced during the summer of 2002 (S.2714/HR 5089) would have extended TEUC benefits by the lesser of 26 weeks or the number of weeks for which an individual received standard unemployment benefits. Another bill, S.2892, would have set the duration of standard benefits at a maximum of 26 weeks, with another seven weeks of TEUC benefits possible in high unemployment states. All of these programs would have ended June 30, 2003.

A number of organizations in the religious community (including the Presbyterian Church [USA]) sent a letter to the Senate urging support for S. 3009, introduced by the late Sen. Paul Wellstone (D-MN) and many of his colleagues, which would have left basic UC benefits at 26 weeks but expanded extended benefits to an additional 26 weeks for all workers, with seven weeks beyond that for those in especially high unemployment states.

The Bush Administration opposes any expansion of unemployment benefits beyond the basic 26 weeks, contending that the economy will eventually improve and take care of the problem. The President is expected to propose a package of tax cuts to stimulate small businesses into hiring.

In the meantime, signs of the hoped-for recovery are slow to appear. Unemployment continues to hover near the 6% mark. The US Department of Labor reports that there are 1.5 million fewer jobs now than there were when the recession started in March 2001, and the number of UC claims rose in September to 426,000, the highest level since April of this year. By the end of 2002, 2.2 million people are expected to have exhausted all UC benefits, according to the Center on Budget and Policy Priorities. Charitable organizations are bracing for the onslaught of requests for survival aid.

MINIMUM WAGE

The federal minimum wage has stood at $5.15 ever since it was last increased in 1997. Repeated efforts to raise it have been rebuffed in Congress. Many states, recognizing that people cannot live on such a low income, have unilaterally increased the minimum wage within their own borders.

The religious community has staunchly supported a proposal by Sen. Edward M. Kennedy (D-MA) that would have boosted the federal minimum by $1.50, in three steps, raising it by 60 cents two months after enactment of the bill, by another 50 cents on January 1, 2003, and by a final 40 cents on January 1, 2004.

Congressional Republicans have indicated interest in a smaller increase in the federal minimum wage, and President Bush has said he would support raising the minimum only if states can opt out of being covered.

According to the US Bureau of Labor Statistics, 72.5 million US workers are paid by the hour. Of those, 2.2 million, or about 3 percent, are paid at or below the minimum wage. An individual who works at minimum wage for 40 hours a week every week of the year, without any vacation or sick leave, earns on $10,712, which is below the poverty line for a single person. For a family with children or with only one wage earner, the situation is even worse.

Opponents of an increased minimum wage contend that most minimum wage workers are teen-agers from affluent families or young adults without families to support, who do not really need the money they earn. According to the Economic Policy Institute, however, 60 percent of the workers who would benefit from an increase are women (most with children) and 68% of people now earning at or below minimum wage are adults. Blacks (at 18%) and Hispanics (at 14%) are disproportionately represented among minimum wage earners.

Another argument used by opponents of increasing the minimum wage is the contention that such raise in wages would increase operating costs and force employers to lay off workers. There is no evidence that this happened the last time the minimum was increased in 1997. In fact, employment was on the increase at that point and continued to grow. The reality is that most employers cannot get people to work for them for such a low wage, so they are already paying more and would not be affected by an increase.

From the standpoint of worker justice, an argument can be made that increasing the minimum wage has an effect on more people than those who receive the increase. Many employers feel that, if they increase the salaries of those at the bottom of the scale, they should also give raises to those in the next tier, in order to preserve a wage differential. If this policy were implemented in the workplace, the result would be increased cost to the employer but also an improved standard of living for both the workers at the bottom of the pay scale and for those next to them. The "ripple effect" of turning such money loose in the economy would be stimulative, since low-income workers tend to spend their earnings quickly for necessities such as food, housing, and clothes, which benefits the entire community where they spend. Thus, increasing the minimum wage benefits not only impoverished workers but also the economy.

GENERAL ASSEMBLY

Minimum Wage: Because wages gained from employment are the primary means by which most Americans satisfy personal and family needs, protecting the adequacy of even minimum wage jobs is a crucial moral issue. The General Assembly of 1988 urged the President and Congress "to raise the minimum wage to its historical level of 50 percent of the average nonsupervisory, nonagricultural wage and provide for regular increases that will keep the minimum wage at an adequate level to lift people out of poverty" (Minutes, 1988, p. 363).

The General Assembly has recognized that minimum wage policy is an essential part of employment policy. The 1996 General Assembly asserted the need to "provide incentives for productive employment for the unemployed, including a livable minimum wage" (Minutes, 1996, pp. 494-495).

Unemployment Compensation: In 1971, the General Assembly asserted "that justice demands that everyone have the material conditions necessary for...physical and social existence..." It called for a guarantee to every American of an income or the opportunity to earn one "large enough to provide for basic needs and to sustain every person's participation, with dignity, in society..." (PCUS, 1971, Minutes, p. 146).