Minimum wage increase is a necessity

By U.S. Sen. Tom Harkin

----

A group of Iowa workers and businesses recently joined me in a discussion about the need to raise the minimum wage. To hear stories of how a raise would help their families and their workers, who serve in important and often difficult jobs, but earn just $7.25 an hour, was to understand how important it is to restore the promise of the American dream.

Since its peak in 1968, the minimum wage has lost 31 percent of its purchasing power, while the prices of basic necessities such as food and rent have continued to climb. This means that workers in Iowa and around the country are falling behind. I have heard from Iowans who are finding it difficult to put food on the table and keep a roof over their head under the current minimum wage. In a country as wealthy as ours, Americans who are working hard and playing by the rules deserve a chance, not just to survive, but to build a better life for their families.

The minimum wage now pays nearly 20 percent less than the poverty level for a family of three. Had it kept up with inflation, it would be worth approximately $10.56 per hour today. The minimum wage should not be a poverty wage. It should be a steppingstone to the middle class.

The Fair Minimum Wage Act of 2013, which I introduced last month with Rep. George Miller, D-Calif., would raise the federal minimum wage to $10.10 an hour from its current $7.25 - over three years, in three steps of 95 cents each - then provide for automatic annual increases linked to changes in the cost of living. Our bill also would gradually over six years raise the federal minimum wage for tipped workers - which currently stands at just $2.13 an hour - for the first time in more than 20 years, to 70 percent of the regular minimum wage.

Raising the minimum wage is one of the simplest and most effective ways to help working families in Iowa and across the country succeed. It also helps our economy by putting additional money in the hands of consumers who will spend it right away in their local communities.

Contrary to publicized myths, research proves that increasing the minimum wage will not cost our country jobs. In fact, increasing the minimum wage to $10.10 per hour will increase Iowa's GDP by $346 million over the course of three years as workers spend their raises in their local businesses and communities. This economic activity will generate 1,400 new jobs in Iowa over the course of three years.

In Iowa, some 340,000 workers would get a raise if the minimum wage rose to $10.10. Of those, 60 percent are women; 82 percent are adults, not teenagers; 50 percent have family income under $40,000; and 45 percent have some college education or more. For these families, a higher minimum wage is not just pocket change - it's a key steppingstone to a better life.

Our nation is on the road to recovery - a recovery that can and must include a raise in the minimum wage.

l U.S. Sen. Tom Harkin of Cumming, a Democrat, is chairman of the Senate Health, Education, Labor and Pensions Committee. Comments: http://www.harkin.senate.gov/contact.cfm