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Statement of Senator Tom Harkin (D-IA) At the HELP Committee Hearing: “From Poverty to Opportunity: How a Fair Minimum Wage Helps Working Families Succeed”

*As Prepared for Delivery*

“In his State of the Union address this year, President Obama said, ‘No one who works full time should ever have to raise a family in poverty.’  I strongly agree.  Indeed, that statement expresses a core American value.

“But today, sadly, we are falling short.  Millions of working families are being left behind.  Our country is enormously wealthy, and the wealthiest members of our society have seen their income skyrocket in recent years.  But the people at the bottom and in the middle, who go to work day in and day out and rely on their wages for their families’ wellbeing, are not sharing in the benefits of our growing economy.  In fact, median household income has fallen 9 percent since 1999.  Former labor secretary Robert Reich tells us that the 400 richest people in America now have more wealth than the bottom 150 million combined.

“Meanwhile, tens of millions of hardworking Americans are struggling just to keep a roof over their heads, to pay their heating bill, to find extra funds for a new pair of shoes for a growing child, even to cobble together the change to take a bus rather than walking miles to work.  When working families must rely on food stamps and food banks to feed their children because their wages are so low, that is unacceptable.  We simply must find a way to shore up the incomes of working Americans. You just can’t get ahead if your job traps you in poverty. 

“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.  But since the 1980s, the minimum wage has lost ground to inflation and is no longer enough to allow a full-time minimum wage worker and his or her family to rise above the poverty line. 

“It’s no wonder that many working people, today, have to turn to the safety net.  In fact, a recent study found that taxpayers are picking up the tab for millions of working families to survive—to the tune of $240 billion a year—because their employers pay rock-bottom, poverty wages.  A survey of low-wage workers by Oxfam America last year found that two-thirds of workers earning under $10 an hour must use public assistance to get by.  This isn’t by choice – the low-wage workers that I have spoken with want to be self-sufficient, but we simply aren’t giving them that chance.     

“We have a moral obligation to fix poverty wages.  And we can fix them.  We can make work a way out of poverty again by raising the minimum wage—one of our nation’s simplest and most effective means to lift working families out of poverty. 

“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, new research shows that raising the minimum wage will reduce poverty, including the CBO report that we will discuss more in depth today.  And a major new economic study from Dr. Arin Dube at the University of Massachusetts at Amherst looked at the historical effects of minimum wage increases, and his work shows that our bill will have an even greater effect on poverty.  His study projects that, under my bill, 4.6 million Americans would be lifted above the poverty line 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 income from a higher minimum wage will make a powerful difference in working families’ lives.  It could pay for seven months of groceries, or six 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 to reduce poverty won’t be done.  The minimum wage is not the sole, silver-bullet solution to poverty.  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 to reduce poverty and income inequality.  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. 

“Furthermore, as our economy grows, simple justice requires that prosperity must reach those at the bottom as well as those at the top. 

“Families need a basic foundation of economic security to start building a better life.  A fair minimum wage ensures that someone who chooses to work, who proudly takes a job tending to children or the elderly, or serving food in a restaurant, or cleaning a hotel room, is not consigned to live in desperate poverty.  A fair minimum wage sets a floor below which no worker is allowed to fall.  It helps to lift families out of poverty and provides them the opportunity to get ahead and to give their children a chance at a better life.

“We have a distinguished panel here today, and I look forward to their testimony.  I’d especially like to thank our minimum wage worker, Alicia McCrary, who traveled here from Iowa to speak today.  I know it is very difficult to travel when you are raising a family, and I am so pleased that you are here with us today.  We had another minimum wage worker witness, Ms. Gwen Moore of Minnesota, scheduled to speak at our original hearing date. I ask unanimous consent to include her prepared statement in the record.  We can never have too many stories from hardworking people.”