Harkin: $10.10 Minimum Wage the ‘Bottom Line’ for Negotiations
Bill sponsor says adopting a lower wage in combination with indexing to inflation would “lock in a sub-poverty wage for the long-term.”
January 20, 2014 - 11:47 am
WASHINGTON – Two top Democrats said last week they are willing to negotiate over the details of a bill that would raise the minimum wage to $10.10 an hour, but they will not change the amount of the increase.
“We’re willing to negotiate,” said Sen. Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor, and Pensions Committee, at the Economic Policy Institute (EPI), a left-leaning think tank. “But $10.10 is a bottom line. We cannot go below that.”
Harkin said adopting a lower wage in combination with indexing to inflation would “lock in a sub-poverty wage for the long-term.”
The senator was joined by the bill’s House sponsor, Rep. George Miller (D-Calif.), and White House Council of Economics Advisers Chairman Jason Furman.
“We cannot put into law a permanent sub-minimum wage,” Miller said. “It cannot be the right answer for a dynamic American economy.”
With midterm elections on the horizon, Democrats are eager to turn the push for a minimum wage increase into a wedge issue that they hope will put Republicans in a difficult position, and attract minority and youth voters whose turnout numbers tend to drop off during nonpresidential elections.
“At the end of the day, I don’t think you’re going to ask your caucus to take into the election the killing of the minimum wage,” Miller said.
The legislation would phase in the minimum wage hike from the current $7.25 an hour to $8.20 in the first year, then $9.15 the year after and to $10.10 in the third year.
The Harkin-Miller proposal also includes a measure that would raise the minimum wage for workers paid in tips, which could be as little as $2.13 per hour in some states that allow employers to use gratuity to cover the difference between the federal minimum wage and the required direct wage. The proposal calls for an increase in this minimum to $3 per hour for one year, and then it would adjust the base annually until it matches 70 percent of the federal minimum wage.
President Obama used his State of the Union address last year to call for a national minimum wage of $9 per hour. In November, the White House endorsed publicly the Harkin-Miller proposal.
A group of 75 leading economists has also backed the bill, including seven Nobel laureates and former economic advisers to several Democratic administrations. The group sent a letter Tuesday in support of the bill to Obama and congressional leaders.
“The vast majority of employees who would benefit are adults in working families, disproportionately women, who work at least 20 hours a week and depend on these earnings to make ends meet,” the letter reads. “At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum-wage increase would provide a much-needed boost to the earnings of low-wage workers.”
Sixty-three percent of Americans favor the boost in the federal minimum wage, according to a Wall Street Journal/NBC News poll.
A recent analysis by the EPI determined that raising the minimum wage to $10.10 would grow the U.S. economy by about $22 billion and create 85,000 new jobs.
According to the Congressional Research Service, approximately 1.6 million hourly workers currently earn the minimum wage. Nineteen states and the District of Columbia require a higher minimum wage than the federal rate, which Obama has cited as a reason to boost the national minimum.
Furman noted that the minimum wage is effectively lower on an inflation-adjusted basis than it was in 1950. At that time, it was worth $7.28 in today’s dollars.
Critics of increasing the minimum wage point out that for many low-wage workers, wages are much higher than the mandated minimum. That is because of the Earned Income Tax Credit, which boosts wages for workers at the bottom of the pay scale.
Opponents also argue that minimum wage prevents some of the least skilled, least educated, and least experienced workers from participating in the labor market because it discourages employers from hiring them.
“Let’s be clear: our federal minimum wage of just $7.25, which has not budged in more than four years, is now a poverty wage. No American who works a full-time job should have to struggle to put food on the table or pay the bills,” Harkin said. “All around the country, we’re seeing the impact of growing income inequality and stagnant wages on millions of American families. Raising the minimum wage will help narrow the income gap and enable millions of low-wage working Americans to make ends meet.”
Harkin said the Senate will take up the bill sometime this month. The issue is likely to get more attention throughout the year so Republicans who oppose the increase will have time “to change their mind,” he added.
Miller recognized the challenge of getting a vote on the bill in the House this year, but he was confident more Republicans would support the legislation in the coming months and that public pressure could compel Congress to hold a vote.
“If you want to continue to burn your brand,” he said, “stay opposed to the minimum wage because you’re going to burn it with a big cross-section of Middle America.”