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

Harkin, Miller, Franken: Five Years Since Last Minimum Wage Increase Has Meant $6 Billion Pay Cut for Low-Wage Workers

Costs of Rent, Groceries, and Mass Transit Fares Have Gone Up While Inflation Has Eroded Purchasing Power of $7.25 Hourly Wage

Thursday, July 24, 2014

WASHINGTON, D.C.—On the fifth anniversary of the last minimum wage increase, Senator Tom Harkin (D-IA), Representative George Miller (D-CA), and Senator Al Franken (D-MN) held a press conference to outline the growing pay cut currently faced by millions of minimum- and low-wage workers as a result of Congressional Republicans’ refusal to raise the minimum wage. For instance, since 2009, the cost of child care has risen more than 14 percent, mass transit fares have increased by more than 21 percent, rent has gone up nearly 10 percent, and groceries are now more than 9 percent more expensive, but the national minimum wage remains stuck at $7.25 per hour. The national minimum wage was last increased on July 24, 2009, from $6.55 to $7.25, as a result of legislation enacted by the Democratic Congress in 2007.

“It has been five long years since minimum-wage workers last received a raise—five long years that the minimum wage has been a poverty wage and five long years as costs have climbed for everything that workers need to buy,” said Harkin, Chairman of the Senate HELP Committee. “In effect, this is an enormous pay cut for workers, and we can see the incredible amount of money that workers—and our economy—have lost since 2009.  If we had simply maintained the real, after-inflation value of the minimum wage since 2009, workers would have earned more than $6 billion extra since then. That’s a pay cut of $6 billion for some of our hardest working Americans. 

“This is an enormous burden on folks who serve customers in stores and restaurants, who clean offices, hotels, and homes, and who take care of our children and our loved ones.  These workers are stuck in low-wage jobs that can’t support a family,” Harkin added. “It’s long past time for us to raise the minimum wage to $10.10 an hour, raise the minimum wage for tipped workers for the first time in more than two decades, and index both to the cost of living so that hardworking Americans no longer suffer billions of dollars in lost pay.”

“Over the past five years, minimum-wage earners have been working harder than ever, only to see their pay continually cut. This is wrong and an affront to the promise of the American Dream,” said Miller, senior Democrat on the House Education and the Workforce Committee. “Workers will tell you how much an increase in the federal minimum wage would mean to them, how it would help them pay for the basics, such as utility bills, rent and groceries. It’s time we give these hard-working Americans the raise they deserve, and help them to provide for their families. It’s time we raise the minimum wage to $10.10 an hour, raise the minimum wage for tipped workers and index both to the cost of living. Workers deserve it, and their families need it. Five years is too long to wait.”

“The minimum wage is all about making sure that work pays,” said Franken, a member of HELP Committee. “If you work hard, and take responsibility, you should be able to put a roof over your head and provide a decent life for your children. But it’s been too long since the federal minimum wage kept that promise to America’s workers. In the last five years, rent has gone up, groceries have gotten more expensive, and child care costs have jumped. But during that same time, the federal minimum wage hasn’t been increased. This is something we’ve got to fight for.”

At the press conference, Harkin, Miller, and Franken displayed a ticking clock, created by the Center for Economic and Policy Research (CEPR), showing that minimum wage workers have lost more than $6 billion in wages since 2009 as inflation has eroded the purchasing power of a $7.25 hourly wage. The clock also showed that workers would have earned an additional $300 billion between 2009 and 2014 had the minimum wage been indexed to inflation from its historical peak in 1968.

The members were joined by Brian Tucker, a fast food worker who earns $8 an hour and struggles to support his family; Chris Sommers, co-owner of Euclid Hospitality Group; and Chris Owens, executive director of the National Employment Law Project (NELP). Tucker and Owens discussed how today’s minimum wage has failed to keep pace with costs, hurting working families and the economy, while Sommers outlined how higher wages at his restaurants have helped him reduce employee turnover, saving time and money. The minimum wage at Sommers’ restaurants is $10.10, which his company was able to implement without raising prices.

“Right now it feels like we’re running in place—like no matter how fast or hard we go, we’re not getting anywhere, we’re just continuously struggling. A wage increase to $10.10 per hour would be a blessing for me and my family, it would be life-changing,” Brian Tucker said.

“To those who say jobs will be eliminated due to wage increases, we say you’re wrong! Three months ago we raised our minimum wage to $10.10 for 175 employees of our restaurants. We’re having an incredible summer. We’ve got lower turnover, better performance, our labor cost is under budget, our sales are great, and we’re expanding. We are opening two new Pi restaurants this year in Cincinnati, Ohio and Miami, Florida – adding at least 100 new jobs! I urge Congress to pay attention to how business really works, listen to the majority of business owners who support a $10.10 minimum wage and take action,” said Chris Sommers.

“Since the minimum wage rose in 2009, living costs are up 11 percent, CEO compensation has grown 30-plus percent, and corporate profits are at an 85-year high, though real wages and household incomes have fallen.  Congress can and should act now to address these imbalances by raising the minimum wage.  This crucial first step will reduce inequality, raise the pay of tens of millions of workers, and build an inclusive and sustainable economy that benefits all of America’s workers,” said NELP’s Chris Owens.

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