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Public Statements

Statements on Introduced Bills and Joint Resolutions

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. HARKIN. Mr. President, for several years now I have come to the floor to talk about the need to bolster the middle class in this country and restore the American Dream. The American Dream is supposed to be about building a better life. If you work hard and play by the rules, you should be able to support your family, join the middle class, and provide a bright future for your children.

But tens of millions of hardworking Americans who are earning at or near the minimum wage are not only struggling to reach the middle class and achieve the American Dream, they are falling behind. We need to do more to support these workers as they try to build opportunity for their families and their futures. A critical first step is to ensure that they earn a fair day's pay for a hard day's work. That is why today I am joining with Congressman GEORGE MILLER to introduce the Fair Minimum Wage Act of 2013 to raise the minimum wage.

Our bill will do three things: first, it will gradually increase the minimum wage to $10.10 an hour in three annual steps. Second, our bill will link future increases in the minimum wage to the cost of living, through the Consumer Price Index, so that people who are trying to get ahead don't fall behind as our economy grows. Finally, our bill will--for the first time in more than 20 years--raise the minimum wage for workers who earn tips, from a paltry $2.13 per hour to a level that is 70 percent of the regular minimum wage. This will be gradually phased in over the course of 6 years, which will give businesses time to adjust while providing more fairness for hardworking people in tipped industries.

These raises are long overdue. Over the past several decades, average wages in this country have stagnated, but the minimum wage has actually declined in real terms. It has not kept up with costs, average wages, or rapid growth in productivity.

Since its peak in 1968, the minimum wage has lost 31 percent of its purchasing power. That means minimum-wage workers are effectively earning almost a third less than they did four decades ago. In fact, if the minimum wage had kept up with rising prices for food, rent, utilities, clothing, and other goods, then the wage would be $10.56 today. But instead it's $7.25. My bill will restore much of the buying power of the minimum wage.

The minimum wage also used to be a meaningful standard compared with what most people earned and compared with what workers in the economy produced. In 1968, it was just over half of average production wages. But today the minimum wage has fallen to 37 percent of the average production wage.

While Americans are working longer and harder than ever, their paychecks don't reflect their contribution. Workers are much more productive now than in the past. Productivity has risen more than 130 percent since 1968. But average wages have not budged in real terms and the minimum wage has lost ground. So while companies have reaped the benefits of all this productivity growth, the people who actually do the work have seen none of these gains.

As Congress has allowed the minimum wage to languish, working families have fallen below the poverty line. In the 1960s and 1970s, the minimum wage kept a family of three above the poverty line--20 percent above it in 1968. But today, a family of three with one minimum wage earner working full-time, year-round, will bring home a paycheck that is 18 percent below the poverty line.

The Fair Minimum Wage Act will restore the value of the minimum wage, bringing families back above the poverty line, to 106 percent of the poverty line for a family of three. With its provision to index the minimum wage to the cost of living in the future, the minimum wage will no longer lose value. It will rise as the economy grows, which will allow working families to keep up with rising costs.

I think it is very important that we talk about the people who will benefit from the Fair Minimum Wage Act. There are 30 million Americans who will get a fair wage because of this bill, either directly by the legislation or indirectly through the ``trickle up'' effects of a higher wage floor. That's one out of five workers in our country that will be impacted.

They do the hard, important jobs to keep our economy running. They are cashiers and sales help in stores; waiters, waitresses, bussers, runners and hostesses in restaurants. They care for our children, elders, and other loved ones. They help us at the gas station or in the parking garage. They clean offices and homes, and maintain buildings and grounds. They provide administrative support in offices. They work in the fields to bring food to our tables. They all deserve a fair wage.

The families of these 30 million workers will also benefit. Eighteen million children have parents who will get a raise. This will be so meaningful for these families, who are working to build a better life. For a full-time, year-round worker earning right at the minimum wage, it will mean gradually moving from $15,000 a year to $21,000 a year. Think about that. Most of us in this Chamber would not take too much notice of a $6,000 raise. But for minimum wage workers, that's nearly 40 percent more, and that will go a long way to buying groceries and school supplies, paying rent, and saving for college or retirement.

Everyone in our country who works hard and plays by the rules deserves these opportunities: and not just to survive, but to aspire to the middle class.

Raising the minimum wage will benefit our economy as well. With an increase in the minimum wage, workers will have more money to spend. This is just basic economics: increased demand means increased economic activity. They will spend their money in their local economies, giving a boost to Main Street. In fact, economists estimate that the Fair Minimum Wage Act will boost our GDP by $33 billion as it is implemented over the course of three years, generating 140,000 jobs in that time.

We know we can afford this. Wages aren't stuck at rock-bottom levels because our economy isn't growing. Our economy is growing. The problem is that growth is going to profits, to shareholders and executives. Inequality is at the highest level we have seen since the eve of the Great Depression. CEOs are raking in millions, while the people who do the real work in this country are struggling just to get by. In 2011, S&P 500 CEOs earned an average of $13 million. The average CEO earns more before lunchtime on his first day of work than a minimum wage worker earns all year. That is simply appalling.

Now some people, specially the big corporations with these lavish salaries, will criticize my bill, saying it will force businesses to lay off workers or cut back their hours. They say workers will be hurt if the minimum wage goes up. But history proves that these assertions are just plain wrong. We know from decades of rigorous research analyzing the real-life effects of minimum wage increases that minimum wage raises along the lines what I am proposing do not result in job losses or reduced hours. Second, these raises do, in fact, boost workers' earnings. This research applies to teenagers, too. I will say it again: minimum wage increases do not cause teenage unemployment.

So we will not see negative effects from raising the minimum wage. But we will see positive effects for businesses and our economy. We know that increased wages boosts productivity and morale. Turnover falls significantly, which saves businesses thousands of dollars in recruitment, hiring, and training costs. Moreover, all businesses would have the same minimum wage, meaning businesses that are doing the right thing by paying fair wages will not be undercut by competitors who pay rock-bottom wages.

The American public knows that opponents' outlandish claims about raising the minimum wage don't hold water. That is why raising the minimum wage is incredibly popular among the American public. A national poll last year showed that 73 percent of Americans support raising the minimum wage to $10 an hour and linking it in the future to the cost of living. Even 50 percent of Republicans support raising and indexing the minimum wage. A 2011 poll showed that more than seventy percent of Americans believe that indexing the minimum wage to keep up with inflation will be good for the country.

The Fair Minimum Wage Act has been endorsed by nearly 200 national and local organizations around the country, and the support is only growing. They represent a wide cross-section of the American community. They are working to end poverty, hunger, and homelessness; to increase community involvement; and to ensure fairness for women and people of color. They are organizations of people of faith and organizations of workers. They are retirees and moms and members of the LGBT community. They are social workers, direct care workers, and steelworkers. And they are small businesses. The bill has been endorsed by the US Women's Chamber of Commerce, representing 500,000 small businesses around the country; by the Main Street Alliance, with chapters in a dozen states and 12,000 small business members; by the American Sustainable Business Council, which along with its member organizations represents more than 150,000 businesses nationwide, as well as more than 300,000 entrepreneurs, managers and investors; and by Business for a Fair Minimum Wage and Business for Shared Prosperity.

Because raising the minimum wage is so popular, and so necessary, many States have moved ahead of the Federal Government to do so. Nineteen states and the District of Columbia have raised their minimum wage above the federal level, all across the country. Ten states have already implemented annual indexing of the minimum wage to keep up with the rising cost of living. Thirty States have increased their minimum wage for tipped workers above the Federal level.

I am proud to introduce the Fair Minimum Wage Act of 2013. It is long past time to give Americans a raise. Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

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