Statement by the Hon. George Miller (D-CA) on the Fair Minimum Wage Act of 2007

Wednesday, January 10, 2007

As part of this first 100 hours of the 110th Congress, I am proud to bring to the Floor, H.R. 2, the Fair Minimum Wage Act of 2007.

For nearly a decade, hard-working Americans earning minimum wage – our nation's poorest workers – have not received a pay raise. The average CEO earns more before lunchtime than a minimum wage worker earns all year.

And for 10 years, the American people have been waiting for a clean vote on a real minimum wage bill, without poison pills, without dilatory tactics. After this November's election, they made it abundantly clear – they will wait no longer. Today, with Democrats in control, we finally have an opportunity for a clean vote.

This has been the longest period in the history of the law without a wage increase. During this time, the minimum wage has dropped to its lowest buying power in 51 years. A full-time minimum wage worker in 2006 earned merely $10,712 -- which is $5,888 less than the $16,000 needed to lift a family of three out of poverty.

The Fair Minimum Wage Act of 2007 would increase the federal minimum wage to $7.25 per hour in three steps over two years. Under this bill, sixty days after enactment, the wage would rise from the current $5.15 per hour to $5.85 per hour. One year later, it would rise to $6.55. And a year after that, it would finally rise to $7.25 per hour. The bill also extends federal minimum wage coverage, under a separate time table, to the Commonwealth of the Northern Mariana Islands.

The Middle Class Squeeze

Raising the minimum wage is critical to fighting the middle class squeeze in this country.

• 59 percent of American workers state that they have to work harder to earn a decent living than did workers 20 or 30 years ago.
• Since 2001, the median household income has fallen $1,300.
• Wages and salaries now make up the lowest share of the economy in nearly six decades. Meanwhile, corporate profits make up their largest share of the economy since 1960's.

While the economy is growing and the wealth of the nation increasing, more Americans are struggling to pay their bills.

• Over the last five-years, the number of Americans living in poverty has increased by 5.4 million to 37 million. One in six children now lives in poverty.
• Since 2000, prices of education, gasoline and healthcare have all greatly outpaced inflation.
• Between 2000-01 and 2005-06, tuition and fees at four-year public colleges increased by 57 percent;
• between 2000 and 2005 the price of regular unleaded gasoline grew by 58 percent; and
• between 2000 and 2005, premiums for family health insurance grew by 73 percent.
• In fact, 2005 marked a horrible milestone in the story of ever-rising health insurance costs in the face of a stagnant minimum wage. That year, the annual cost of the average family health care premiums grew to be more than the annual salary of a full-time minimum wage worker ($10,880 versus $10,712).
• Considering the high costs of housing and child care in this country, it is clear that simply paying for basic necessities is squeezing the budgets of most American families.

Raising the minimum wage is an important first step for the Congress in its efforts to stand up for the middle class and to stem the middle squeeze.

This raise will make a real and critical difference in millions of people's lives.

For a family of three, the increased minimum wage will mean an additional $4,400 a year, equaling 15 months worth of groceries or two years worth of healthcare.

Raising the minimum wage to $7.25 per hour in 2009, taking into account the increases in a family's Earned Income Tax Credit and refundable Child Tax Credit, would move a family of four from 11 percent below the poverty line in 2009, if there is no change in law, to 5 percent above the poverty line, if Congress passes and the President signs the Fair Minimum Wage Act.

Who Benefits From An Increased Minimum Wage

Who will benefit from this minimum wage increase?

• Nearly 13 million workers -- 5.6 million directly and 7.4 million indirectly – would benefit from an increase in the federal minimum wage.
• 79 percent of these workers are adults, and the majority of them work full-time.
• 7.7 million of these workers are women.
• 3.4 million are parents.
• 4.7 million are people of color.
• Families with affected workers rely on those workers for more than half of their family's income. 46 percent of child-rearing families with affected workers rely solely on the earnings from those workers.
• Over 6.3 million children would see their parents' income rise.

Those are the workers and their families who will see pay raises, directly or indirectly, from this minimum wage increase.

Beyond those working families, however, the economy as a whole will benefit from a minimum wage increase.

• A recent study by the Fiscal Policy Institute of job growth in states that have passed higher minimum wages than the federal minimum wage found higher job growth in the those states than in the states using only the lower federal minimum wage.
• Overall retail job growth between 1998 and 2006 was 10.2% in the higher minimum wage states and only 3.7% in federal minimum wage states. That's almost a three-fold difference. Job growth across sectors, not just retail, was 30% greater in the higher minimum wage states than in all other states.
• And this study found the same trends for small business. Small business job growth was 25% greater in higher minimum wage states than in federal minimum wage states, between 1998 and 2003. Small business retail job growth was also greater in higher minimum wage states – 4.1% versus 2.6%.

When you give workers a raise, particularly the poorest workers, they spend that money on basic necessities, and the economy reaps the benefits. Employers benefit, too.

• When you pay workers a decent wage, employers – small, medium, and large – benefit from reduced turnover, higher productivity, and savings on recruitment and training costs. When San Francisco airport screeners received a pay raise, for example, a study found that their annual turnover rate dropped from a staggering 95% to just 19%.

Overwhelming Support for a Minimum Wage Increase

The American people have understood the need for a minimum wage increase for a long time. They have been ahead of the curve on this issue.

• The minimum wage increase has broad popular support. Recent polls consistently show 80% of the American public supports an increase in the minimum wage. Some polls go as high as 89%.
• When given a chance to vote on a minimum wage increase, Americans vote yes. This past November, ballot initiatives to raise the state minimum wages were on the ballot in six states -- Arizona, Colorado, Missouri, Montana, Nevada, and Ohio. All six minimum wage increases passed.
• Today, 28 states plus the District of Columbia have a higher minimum wage than the current federal minimum of $5.15 per hour. In fact, these states have a higher minimum wage than the first increase that would take place under H.R. 2. Twenty-one of them are already set to have state minimum wages near or above $7.25 per hour in 2009, the final increase required by this bill.

The minimum wage increase has bipartisan support.

• I'm proud to say that this bill, H.R. 2, was introduced last week with well over 200 original cosponsors, including seven Republicans.

Support for this minimum wage increase comes from labor unions, community groups, priests, rabbis, Nobel-winning economists, and business owners.

• Last year, some 665 economists, including several Nobel Laureates, signed a statement in support of raising the minimum wage.
• This week, over 575 national and local organizations signed an open letter to Congress calling for passage of H.R. 2, clean, without any additional provisions that would slow down this raise.
• More than 1,000 Christian, Jewish, and Muslim faith leaders did the same.
• In their letter calling for passage of H.R. 2, the U.S. Conference of Catholic Bishops wrote: "For us, it is a matter of simple justice for a decent society."

Minimum wage workers urgently need a raise. It is time for the Congress to stand up for the dignity and rights of these hard working Americans. I urge my colleagues to pass the Fair Minimum Wage Act of 2007 today. It is time to pass a clean bill, without any add-ons, without any delay. The workers of this country have waited long enough.