Raising the Minimum Wage and the TPP

Floor Speech

Ms. WATERS. Mr. Speaker, I congratulate the gentleman from Wisconsin (Rep. MARK POCAN) for organizing last night's Special Order Hour on raising the minimum wage and the negotiations over the Trans-Pacific Partnership (TPP).

I very much welcome this opportunity to talk about trade issues, the minimum wage, and the growing wage gap in our country because they are closely related, in different ways, to one of the most urgent social, economic and political challenges of our time. I'm talking about the problem of growing inequality in the United States.

Over the past three decades, income inequality in the United States has been steadily on the rise. In fact, just before the 2008 financial crisis, the U.S. reached levels of inequality not seen since the late 1920s.

Today, the United States has the highest level of inequality of any advanced industrial nation. According to an analysis by the AFL-CIO, the average CEO at 327 available companies in the S&P 500 index is paid 354 times the average worker.

Moreover, a recent study showed that in 2010, the top 1 percent of U.S. families captured as much as 93 percent of the Nation's income growth gained during the economic recovery. So, this means that the most unequal advanced industrial economy in the world is becoming more so.

It is time to have an open debate and discussion on the wage gap in our country. This is important from a moral standpoint, as a matter of equity and fairness. But it is also important from an economic and political standpoint. That is, excessive inequality not only undermines social and political cohesion, it has also been shown to have negative effects on growth.

Recent research at the IMF has shown that excessive inequality slows growth because depressed earnings lead to weaker demand and lower consumption.

Now, I understand that in a capitalist system, some degree of inequality is necessary for the function of a market economy, since it creates incentives to work hard and take risks. Left entirely to its own, however, the market system will produce more inequality than is economically necessary. And here in America, we have much more inequality than is necessary for efficiency.

This is also a political problem. We now have an increasing degree of resistance on the part of a lot of Americans to efforts to enter into new trade agreements because they are viewed as elevating the interests of capital over all other considerations.

Last month, I joined with 150 of my congressional colleagues in a letter to the President to express our serious concerns about the ongoing negotiations over the Trans-Pacific Partnership (TPP). We urged the President to engage in broader and deeper consultations with Members of Congress about what will be included in this broad-ranging international trade agreement. In addition to tariff issues, this agreement could include provisions related to labor, food, natural resources, the environment, patent and copyright law, health care, energy, telecommunications and financial services. As the Ranking Member of the House Financial Services Committee, it is particularly important to me that my committee is consulted about any provisions affecting financial services.

Past trade negotiations have resulted in NAFTA, the creation of the World Trade Organization, and Free Trade Agreements with Central American countries, Peru, Panama, Colombia, and South Korea. All of these agreements were promoted by large corporations, which claimed they would create jobs. But these were empty promises, and many of these same large corporations have continued to ship jobs overseas.

What American workers need is good jobs with good pay. That is why we need to make this discussion of the wage gap and the minimum wage a top priority.

The Federal minimum wage has been stuck at $7.25 per hour for the past four years. The value of the minimum wage has not kept up with the cost of living, and record-breaking corporate profits have not trickled down to working people.

The real value of the minimum wage is at a historic low. Today, 40 percent of American workers actually make less than the minimum wage was worth back in 1968. That is almost one quarter of American workers. Too many American families who depend upon the minimum wage are seeking Food Stamps and Section 8 housing assistance and are constant visitors to our food banks.

The American people understand the importance of fair wages, and many States and local communities have taken matters into their own hands. According to the National Conference of State Legislatures, 19 States and the District of Columbia already have a minimum wage that is higher than the Federal minimum wage.

The National Conference of State Legislatures also reports that in 2013, the legislatures in California, Connecticut, New York, and Rhode Island all passed bills to increase the minimum wage beginning in 2014. The legislature in California increased the minimum wage to $10 an hour by 2016. In New Jersey, voters approved a constitutional amendment to increase the minimum wage. In Maryland, the county councils in Montgomery and Prince George's counties both voted to increase the minimum wage to $11.50, higher than any rate currently in effect in the United States.

The Fair Minimum Wage Act--H.R. 1010--would increase the Federal minimum wage from $7.25 per hour to $10.10 per hour over three years and then index it to inflation. I am one of 150 cosponsors of this bill.

It is time for Congress to debate the issue of raising the minimum wage, as well as other policies to address the growing wage gap in our country. This debate must take place in full view of the American public.

Increasing the minimum wage will send a clear signal to Americans that we understand that the benefits of growth and free trade need to be more broadly shared in society. It's the right thing to do morally, economically, and politically.

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