The Minimum Wage
Floor Speech
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I rise in this Chamber to address an issue that is critical to working families across our Nation; that is, the Federal minimum wage.
First, I thank Senator Tom Harkin for his leadership on this issue. He has advocated year after year, decade after decade that we need to ensure that we have an economy where workers fully participate in the fruits of their labor.
We should not have a society in which all of those fruits go simply to the very few at the expense of a fair wage for those who create that success. I thank Senator Harkin for leading this fight over this extended period of time on behalf of working families.
He believes, as I believe, that we should measure the success of our Nation not by the growth of the GDP, not by having one eye on the Dow Jones and one eye on the S&P 500, we should measure the success by the success of our families. That is what this debate on the minimum wage is all about.
This issue matters a great deal to me because I come from a blue-collar family. My father was a mechanic. He employed those skills in a sawmill. He was the millwright, the person who keeps the machinery going so the plant can keep operating. When it is operating, there is work for the workers, and there is certainly success for the company. He went on to work as a mechanic in many other ways.
On that mechanic's wage, he was able to raise a family and participate fully in the American dream. He and my mother were able to buy a home. They could afford to take us camping. They could afford to save a little bit to help us be able to go to college. That is what happens when workers get to participate in the success of our economy.
A minimum wage is part of this story because it is the foundation and the benchmark that helps set wages throughout the economy.
In the time period after World War II, our economy grew quickly, our wages grew quickly, and workers took those wages and they bought products, and that demand fueled further production, which put more people to work. It was an upward cycle.
But more recently we have had a philosophy imposed, advocated, and put forward by the top 1 percent that if all the growth in revenue comes to them, they will be the job makers. They will be the job creators and everyone else will thrive.
If there was ever a moment in U.S. history when the complete falseness of this philosophy was evident, it is right now, because from 2008 until now, 95 percent of the newly created wages have gone to the 1 percent, to the very top. So we should have more jobs than we know what to do with on the philosophy that has been advocated so recently on the floor of this Senate, that we should minimize the wages at the bottom to maximize the profits at the top.
That is a downward spiral for a very clear reason, and it is this: People don't make things in society if the middle class doesn't have the money in their pockets to buy them. If they don't have the money, they don't go to the restaurant, the restaurant doesn't hire the waiter, and the restaurant doesn't hire the dishwasher. It doesn't open a new outlet and employ more people.
There are certainly many factors that have contributed to shrinking paychecks for working Americans, but the declining purchasing power of the Federal minimum wage is a major factor.
The Federal minimum wage sets an important standard for how the contributions of working families are valued. The minimum wage sets a floor on wages. It is a benchmark not only for minimum wage workers but for our entire wage scale. When the minimum wage goes up, the value placed on working Americans all across the economy goes up.
In 1968, when I was 12 years old, the Federal minimum wage was equivalent in today's dollars to about $10.50, unlike the wage we have now which is $7.25. So the purchasing power has roughly dropped by one-third, and that is not to the benefit of the workers, that is not to the benefit of all of the small businesses that provide retail services that benefit when a worker can afford to buy those services.
Putting money into the pockets of minimum wage workers lifts millions of working families directly. It lifts millions more because of the indirect effect of providing more demand for products in the economy.
Today a worker who works 40 hours per week at the Federal minimum wage makes barely $15,000 per year. That puts a family of two below the poverty line. That is poverty despite the fact the mother is working full time 52 weeks a year. A family of three puts them further below the poverty line because of the additional expenses of taking care of a second child. That is wrong.
The more we look at the numbers, the more it becomes clear that the current minimum wage is insufficient to provide a foundation for a family. We need to raise the minimum wage because there is no way to support a family on $7.25 per hour, less than $15,000 per year.
A recent study estimated that a worker paid the Federal minimum wage in States as diverse as Minnesota, Texas, and Pennsylvania would have to work more than 90 hours per week to afford rent on a market-rate two-bedroom apartment--90 hours per week, more than two full-time jobs, 13 hours of work per day, Monday through Sunday. Imagine working from 9 a.m. to 10 p.m. on your feet, getting up, doing it day after day, week after week, and still you can't afford rent on a two-bedroom apartment--no breaks, no vacations, no sick days, no benefits, and you can't afford rent on a two-bedroom apartment.
Without a minimum wage that comes closer to families' real costs of living, our economy will continue to leave behind too many hard-working Americans.
The legislation we are debating this week would raise the Federal minimum wage to $10.10 per hour and index it to inflation to sustain the purchasing power. That doesn't get us back to the purchasing power of 1968, but at least it comes a lot closer.
Let us understand what we are talking about. We are not talking about an entry wage for teenagers. The vast majority of folks who earn the minimum wage are adults--far more than 80 percent. More than four out of five are adults, more than half of whom are women. The earnings of these families contribute to the support of nearly one in four American children.
Contrary to the arguments made for the superwealthy and couched in sympathy for the poor we heard a few minutes ago on this floor, this minimum wage would lift 4.6 million Americans out of poverty. It would give America's low-wage workers paychecks that better reflect their contribution, their work, and their value in our economy.
Some in this Chamber, as we heard not so many minutes ago, would try to convince us that this is bad for business. Nothing could be farther from the truth. For proof, just look to the Northwest. In Oregon, we know this model works because Oregon has road-tested the model. We don't need to have theoretical debates about it; we have a real-life example in the State of Oregon. Our minimum wage has been indexed since 2002. It sits at $9.10 per hour. Indexing enables businesses to plan for small and steady increases rather than to speculate about potential dramatic leaps.
Oregon's restaurant industry, one of the largest employers of workers at Oregon's higher minimum wage, is projected to grow faster than the national average--faster. In fact, a higher minimum wage may well create jobs. The reason is simple: When workers have more in wages in their pockets, they spend more in our retail stores, which then hire more workers to meet the demand. When the retail stores sell more to the workers who have more money in their pocket, they order more from the factory and the factory employs more workers. A study by the Economic Policy Institute found the higher minimum wage we are debating would create 85,000 jobs.
Strengthening our Federal minimum wage is, at its core, about basic respect and basic fairness. It is about recognizing there is dignity in work and that when we allow working families to fall farther and farther down the wage chain we all pay the price. Consider the many aspects that take away from our society. A mother who has to pursue four minimum wage jobs to try to fill in when the earnings from one or more jobs are too low to support a family means she is not at home helping to guide her child. That is not helping to build a strong and productive future for that child or for our society in general.
It doesn't matter whether you are a CEO or a janitor, if you work full time in America, you should not be living in poverty. If we pay the janitor a little more, it helps a lot more people than just that one worker. Those wages go straight back into the broader economy that the CEO and his or her company depend upon.
So let's do what is right for our workers. Let's do what is right for our economy. Let's pass this bill and restore the power of the minimum wage for America's working families.
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