Harkin Statement on President’s Speech Addressing Income Inequality, Need to Raise Minimum Wage

WASHINGTON, D.C.—U.S. Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, today issued the following statement in response to President Obama’s speech addressing income inequality and the need to raise the minimum wage.

In November, the President expressed his support for a proposal, introduced by Harkin in the Senate and Congressman George Miller (D-CA) in the House, to increase the minimum wage to $10.10 in three steps and provide for automatic annual increases linked to changes in the cost of living. It would also gradually raise the minimum wage for tipped workers, currently $2.13 an hour, for the first time in more than 20 years——to 70 percent of the regular minimum wage.

“Today, President Obama delivered a powerful message: low-wage jobs and income inequality are only increasing and families are struggling just to put food on the table. For many working Americans in minimum- and low-wage jobs, that truth hits home,” Harkin said. “At just $7.25 an hour, today’s minimum wage has one-third less buying power than it did at its peak in 1968.   Even since the last minimum wage increase, prices of basic necessities have risen substantially—while workers’ paychecks have not grown.  As a result, tens of millions of Americans—even those in full-time jobs—are struggling to make ends meet, or must rely on public assistance to afford basic needs like groceries and heat.

“Our bill would give 28 million Americans a raise and bring much-needed relief to millions of working families.  It would also strengthen our economy by giving workers money to spend in local communities and economies around the country,” Harkin continued. “I thank the President for his continued support in this effort and look forward to working with my colleagues to move this measure forward.”

A Hart Research poll released in July found that 80 percent of Americans support the Harkin-Miller proposal to raise the minimum wage to $10.10 Further, 92 percent of Democrats, 80 percent of independents, and 62 percent of Republicans support the Harkin-Miller proposal. Nearly three-quarters of Americans (74 percent) also say that raising the minimum wage should be an important priority for Congress to address over the next year, including 38 percent who say it is very important.

Fast Facts on the Minimum Wage

• The minimum wage today is at a historic low.  The minimum wage has lost 33 percent of its buying power since its peak in 1968.  If the minimum wage had kept up with inflation since 1968, it would be worth $10.75 per hour today. 

• Twenty-eight million American workers will get a raise under the bill.  More than half of these are women, and 15 million women would get a raise. The vast majority (88 percent) are adult workers, not teenagers.  Over 14 million children—19 percent of American children—have a parent who will get a raise.

• The minimum wage today pays only $15,000 per year, which is $3,000 below the poverty level for a family of 3.  The Harkin-Miller proposal will boost the yearly minimum wage salary to $21,000, lifting families above the poverty line.

• Increasing the minimum wage to $10.10 per hour will give $35 billion in raises to millions of workers over the course of three increases, and increase GDP by nearly $22 billion as workers spend their raises in their local businesses and communities.  This economic activity will generate 85,000 new jobs over the same timeframe.

• In 2014, 21 states and the District of Columbia will have state minimum wages above the federal level.   Ten states already have indexing in place to ensure that minimum wage workers do not fall behind, and an eleventh will start in 2015.  Thirty-two states have already acted to increase their minimum wage for tipped workers above $2.13 an hour.

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