Raise the Minimum Wage

By Bernie Sanders, Reader Supported News

21 December 13

ith states and local governments taking action to raise the minimum wage, Sen. Bernie Sanders called on Wednesday for Congress to pass legislation he cosponsored to push up the national minimum wage to $10.10 an hour. In Vermont, the wage will go up to $8.73 on New Year's Day. In Washington, D.C., the city council on Tuesday unanimously approved raising the minimum wage to $11.50 an hour, one of the highest rates among American cities. Of all the major economic issues facing our country - high unemployment, low wages, growing poverty and a widening income and wealth gap - raising the minimum wage is a way to address them all, Sanders said.

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The real value of the federal minimum wage has fallen since 1968 by more than 30 percent. If it had only kept up with inflation, it would be $10.70 per hour today. Instead, it's been stuck at $7.25 an hour since 2009. Many of the new jobs created since then have been low-wage and part-time. While millions of Americans are working longer hours for lower wages, the prices they pay for food, gasoline, medicine, housing and almost everything else have gone up.

Raising the minimum wage to $10.10 an hour would increase pay for nearly 30 million Americans, 90 percent of them at least 20 years old.

Sanders said raising the minimum wage would be a step toward reducing income inequality in America. "While the American middle class is shrinking and more people are living in poverty, the people on top are doing phenomenally well. Since 2009, CEOs in America's most profitable corporations received a 42 percent pay raise, an astronomical 354 times more than their average worker. According to the latest study, 95 percent of all new income between 2009 and 2012 went to the top 1 percent. Boosting the minimum wage to at least $10.10 an hour would be a modest but important step toward reversing the record level of income inequality plaguing this country.

Increasing the minimum wage also will create jobs. According to the Economic Policy Institute, a $10.10-an-hour minimum wage would generate 140,000 jobs, expand the economy by more than $32 billion and increase the take-home pay of Americans by $52 billion. When low-wage workers get a raise they spend their extra money at local grocery stores and small businesses. That increases demand for products and boosts the entire economy.

While unemployment is going down, the percentage of working-age Americans who have a job is the lowest it has been in 35 years. Counting those who have given up looking for work and those who are working part-time because they can't find a full-time job, the real unemployment rate is 13.2 percent, not the official 7 percent. "And let's be clear," Sanders said, "most of the 8 million new private-sector jobs that have been created over the past 45 months are low-wage jobs in fast-food restaurants, bars, department stores, malls, hotels, and other industries. Meanwhile, six out of the ten jobs lost during the Great Recession were decent-paying jobs that paid up to $21 an hour.

Ironically, not only would increasing the minimum wage boost the economy and narrow the gap between the rich and the poor, it would also reduce the deficit. That's because tens of millions of Americans working in Wal-Mart, McDonald's, Burger King and other multi-national corporations are paid such low wages that they need food stamps, Medicaid, public housing and other assistance just to survive.

Sanders cited the Wal-Mart example. The Walton family fortune of $144 billion is greater than the combined worth of the bottom 40 percent of Americans. Yet the average Wal-Mart associate makes less than $9 an hour. This means that in order to feed their children, see doctors and put a roof over their heads, many Wal-Mart workers must rely on federal assistance. Nearly half of the children of Wal-Mart associates are either on Medicaid or uninsured. In many states, Wal-Mart has the highest percentage of employees receiving food stamps.

"American taxpayers should not have to subsidize the low wages at Wal-Mart to make the richest family in America even wealthier. That is not only morally grotesque, it is bad economic policy," Sanders said.

"The working families of America are struggling. Raising the minimum wage will not solve all our economic problems. It will, however, be an important step forward," Sanders said.