The Progress Report:

JULY 24, 2007

by Faiz Shakir, Nico Pitney, Amanda Terkel, Satyam Khanna, and Matt Corley Contact Us | Tell-a-Friend | Archives | Permalink

ECONOMY

Pay Raise for America

Today is a good day for 13 million Americans. It's the first time in a decade that the federal minimum wage has risen, jumping 70 cents to $5.85 an hour. The minimum wage will continue to increase each summer until 2009, when "all minimum-wage jobs will pay no less than $7.25 an hour." This raise is long overdue. The conservative 109th Congress, aided by President Bush, repeatedly blocked any increase in the minimum wage. Under the previous minimum wage, a full-time worker making $5.15 an hour earned $10,712 a year; the federal poverty line is $17,170. "It has been a long time," said Sen. Ted Kennedy (D-MA). "We have heard those that say, well, with the increase in the minimum wages, this will cost jobs. It will bring hardship upon these people. That's what they have said on every increase. This is the 11th increase in the minimum wage and they have been wrong every other time."

MORE MONEY FOR NECESSITIES: Of the 13 million Americans who will benefit from this minimum wage increase, more than 60 percent are women and almost 40 percent are people of color. As Kennedy notes, workers making the minimum wage will "almost immediately earn an additional $1,500 to help support their families. When the full increase takes effect in 2009, these workers will see a total increase of $4,400 per year." This amount could pay for more than two years of health care, 15 months of groceries, or 30 months of college tuition at a public, two-year college. According to an analysis by the Center for American Progress, "Before today, minimum-wage earners working to buy hamburger dinners their families would've had to work nearly four more hours per week today than they did in 1997 to buy the same meal. After the increase, they'll be able to work an hour and a half less to feed their families."

RISING POVERTY DURING BUSH ADMINISTRATION: Under Bush, the number of Americans in poverty has increased by 5.4 million. Approximately "37 million Americans currently live in poverty, including 13 million children. Among full-time, year-round workers, poverty has increased by 50 percent since the late 1970s." In 2005, the richest one percent of Americans had the largest share of the nation's income -- 19 percent -- since 1929, while the poorest 20 percent of Americans had only 3.4 percent of the nation's income. At $5.15 an hour, the minimum wage was at its lowest level in real terms since 1956. But even with this raise, more than two dozen states and the District of Columbia already have minimum wages higher than the federal level. According to the Congressional Research Service, "If the minimum wage were linked to the real purchasing power of a dollar, it would already have reached $9.05 in January 2006." Many of the 2008 presidential candidates have made raising the minimum wage even further a focus of their campaigns, with Sen. John Edwards (D-NC) promising in last night's Democratic debate to raise the level to $9.50 an hour by 2012. Former senator Mike Gravel promised a living wage, and Sen. Chris Dodd (D-CT) called for a a raise of "at least $9 or $10."

RIGHT-WING OBSTRUCTION: According to a Dec. 2006 poll, 80 percent of the American public supports an increase in the minimum wage. Yet even in the new Congress, the right wing has tried to obstruct any wage increase. Conservatives in the 110th Congress attempted to obstruct progress on raising the minimum wage, forcing the legislation to garner a supermajority of 60 votes to end debate and vote on the bill itself. "This bill is unfair to workers and, in many cases, it will be harmful to the very people it is supposedly designed to help," said Sen. Tom Coburn (R-OK) in February. "Most workers will experience a minimum-wage penalty rather than a minimum-wage benefit because of this bill." Conservatives, such as Coburn, argued that a raise in the minimum wage would hurt small businesses. But an American Progress study found that employment in small businesses, the number of small businesses, and inflation-adjusted small business payroll growth grew more in states with higher minimum wages than federal minimum wage states. A recent Gallup poll found that "three out of four small businesses said that an increase in the minimum wage would have no effect on their company." Rep. Roy Blunt (R-MO) tried to insist that Members of Congress should also get a raise too, even though they already have an annual salary of $165,200.