US Senate Committee on Health, Education, Labor, & Pensions

Statement of Senator Tom Harkin (D-IA) On Senate Floor: “A Fair Minimum Wage Will Help Lift Millions Out of Poverty”

Wednesday, January 29, 2014

***As prepared for delivery*** 

WASHINGTON, D.C. – In a floor speech today, Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, said that the President’s announcement in last night’s State of the Union that he would sign an executive order to raise the minimum wage for new federal contract workers is a critical first step towards ensuring fair wages for American workers.  Harkin pledged to continue to work with the Administration and his fellow members of Congress to raise the minimum wage. Harkin is the author of legislation, along with Congressman George Miller (D-CA), that would raise the federal minimum wage to $10.10 per hour, raise the wage for tipped employees for the first time in more than 20 years, and index the wage to inflation in future years.

“We must recognize that tens of millions of working Americans struggle to put food on the table, a roof over their head, and pay the bills every month,” Harkin said. “This is a fundamental failing of our economy, and it’s something that we not only have a moral obligation, but also the ability, to fix.  We can do so by raising the minimum wage—one of our nation’s simplest and most effective means of lifting working families out of poverty.”

The full text of Harkin’s remarks, as prepared for delivery, is as follows.

“Earlier this month we commemorated the 50th anniversary of President Johnson’s declaration of ‘unconditional war on poverty.’  That War on Poverty was a massively successful initiative, helping tens of millions of Americans to lift themselves out of poverty, reducing hardship, and empowering people to build new opportunities for the future.

“To this day, food stamps ensure that children don’t go hungry.  The Elementary and Secondary Education Act insists that all children, regardless of background, can learn and must have an equal opportunity for a better future.  Legal services help people with limited resources to seek protection from exploitation.  Low-income families fight poverty in their own communities by helping to lead Community Action Agencies.  The War on Poverty and Great Society encompass a tremendous list of achievements that I cannot begin to do justice to, today. 

“However, we know we still have more work to do.  Too many of those successful programs and policies have been reduced or rolled back under subsequent Presidents.  And what’s more, our economy has changed in such fundamental ways, with decades of wage stagnation and rising income inequality, that we must now urgently return our attention to policies that will ensure that working families can still get ahead in America. 

“We must recognize that tens of millions of working Americans struggle to put food on the table, a roof over their head, and pay the bills every month.  This is a fundamental failing of our economy, and it’s something that we not only have a moral obligation, but also the ability, to fix.  We can do so by raising the minimum wage—one of our nation’s simplest and most effective means of lifting working families out of poverty. 

“I am very pleased that President Obama has taken the first step in this effort by announcing an Executive Order that will require future federal contracts to provide wages of at least $10.10 an hour to our nation’s contract workers.  I applaud President Obama’s bold step to ensure that the federal government is a leader in promoting good jobs that pay fair wages.  I think most Americans would agree that taxpayer dollars should not support companies that pay poverty wages.  This Executive Order is a strong step in the right direction.  But we have more work to do, and the next, critical step is to raise the minimum wage.

“We used to agree that if you worked hard and played by the rules, you should be able to earn enough to support your family and keep a roof over your head, put some money away for a rainy day, and have a secure retirement.  The minimum wage played a critical role in doing that, which is why presidents and elected leaders from both parties supported fair increases in the minimum wage.  And from time to time, we adjusted the minimum wage on a bipartisan basis to help working families keep up with inflation and the changing economy.

“But, recently, we’ve heard a new, disturbing set of talking points from our friends on the other side of the aisle.  They claim that raising the minimum wage doesn’t actually reduce poverty.  They argue that minimum wage workers don’t really come from poor families, or that no one stays in a minimum wage job long enough to be trapped in poverty. 

“The facts prove these arguments are simply untrue.  The fact is that a majority of people who would benefit from an increase in the minimum wage come from low-income households, and many of those workers have been trapped in jobs at or near the minimum wage for years at a time.

“Indeed, when you listen more closely, the offensive underlying premise of all of these arguments is that anyone can rise out of poverty if they just work harder.  Tell that to Nereida Castro of Des Moines.  She and her husband both work minimum wage jobs in the fast food and construction industries.  They have 5 children to support, but Nereida says they live day to day because of their bills and expenses.  Her family ‘has to limit many things to give to our kids to only make rent, to cover basic expenses[.] We have to limit so much.’  A raise, she says would allow her to ‘live a life where I don’t feel like I’m drowning.’ 

“Or tell it to Nancy Salgado, a 27-year old single mother with two kids, ages 2 and 7. She has worked at McDonald’s for the past 10 years but makes just $8.25 per hour, the minimum in her home state of Illinois.  She struggles to be able to pay for necessities such as milk and shoes for her children.  She recently confronted the president of McDonald’s USA, saying, ‘I'm a single mother of two. It's really hard for me to feed my two kids and struggle day to day…Do you think this is fair that I have to be making $8.25 when I've been working at McDonald's for 10 years?’

“For Senators and Representatives sitting comfortably here in Washington to preach to working mothers who are struggling hard to get ahead, to tell them that they’re just not working hard enough—this is beyond offensive. 

“No one disputes that hard work is a big part of the path out of poverty.  But you also need a basic foundation of economic security to start building a better life.  How are you supposed to pay for a community college course on $7.25 an hour?  How are you supposed to find a better job when you’re standing in line at a food bank because your wages won’t cover all of your household expenses?  How are you supposed to build a better life for your kids when you can’t even find them safe child care while you work?

“You just can’t get ahead if your job traps you in poverty. It hasn’t always been this way.  We used to agree that minimum wage workers – people who perform some of the most difficult and essential jobs in our society – should not have to live in poverty. 

“The minimum wage kept families above the poverty line in the 1960s and ’70s.  In today’s dollars, a minimum wage worker took home $10.71 an hour in 1968, or $22,000 a year working full-time.  But since the 1980s, the minimum wage hasn’t even been enough to help a full-time minimum wage worker and his or her family to rise above the poverty line.  Today, a minimum wage worker who has a full time job earns just $15,000 per year – below the poverty line for a parent with even one child.

“It’s no wonder that working people have to turn to the safety net.  In fact, a recent study found that taxpayers have to pick up the tab for millions of working families to survive—to the tune of $240 billion a year—because their employers pay such rock-bottom wages.  In tough budget times, we can’t just have the government be responsible for supporting an adequate standard of living.  We want an economic system that allows all families who get up and go to work to be able to support themselves and to be self-sufficient. 

“But we can and must rectify this injustice.  My legislation, the Minimum Wage Fairness Act, introduced along with Majority Leader Reid, will raise the minimum wage to $10.10 an hour in three annual steps; it will link the minimum wage to the cost of living in the future; and it will provide for a raise in the minimum wage for tipped workers for the first time in more than 20 years. 

“When it is fully implemented, the minimum wage will no longer be a poverty wage.  It will lift families above the poverty line.  And through the indexing mechanism, it will keep families above the poverty line. 

“In fact, a major economic study released just a few weeks ago quantifies the effect:  its careful analysis proves that raising the minimum wage does, indeed, reduce poverty significantly.  And it projects that, under my bill, 4.6 million people would be lifted above poverty when the $10.10 wage is fully implemented, and that number will rise to 6.8 million people in the second year after implementation.

“But this is not just about statistics.  The additional money from a raise will make a real difference in working families’ lives.  It could pay for 7 months of groceries, or 6 months of rent.  It could buy an additional 1,600 gallons of gasoline a year.  Families may be able to put some funds away for a rainy day, or pay for that community college course that will help them get ahead.

“Now, once we raise the minimum wage, our work on poverty won’t be done.  The minimum wage is not the sole, silver-bullet solution to poverty.  Of course not.  There will always be many Americans who are temporarily unemployed, who are unable to work, or who are beyond their working years; they will need different types of assistance.  But raising the minimum wage is an essential component of any effort.  We cannot eradicate poverty—particularly for the working poor and their children—until work is truly a path out of poverty, not a trap keeping people down. 

“As long as our economy continues to produce low-wage jobs, people will need to fill them.  And as long as people need work, they will fill those jobs.  However, a fair minimum wage makes sure that someone who takes that low-wage job doesn’t have to live in desperate poverty.  A fair minimum wage sets a floor below which no worker is allowed to fall, and it helps to lift families out of poverty.

“I look forward to our upcoming debate on this issue, when we will consider my bill on the floor.  I encourage all of my colleagues to support raising the minimum wage.”

             

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