No working American should be forced to survive in poverty. That is why I am proud to be an original co-sponsor of the proposed "Fair Minimum Wage Act of 2013," (H.R.1010) introduced by U.S. Rep. George Miller (D-Calif). Our bill would increase the federal minimum wage to $10.10 per hour over three years, increase the minimum wage for tipped workers, and adjust America's basic wage level for future increases in the cost of living.
H.R. 1010 has gained 189 co-sponsors in the House of Representatives, including six of my seven Maryland colleagues. The companion legislation in the Senate (S.460), introduced by Iowa Sen. Tom Harkin, now has 33 co-sponsors, including Maryland senators Barbara Mikulski and Ben Cardin. Yet, despite this substantial body of supporters in Washington, not a single Republican has demonstrated the foresight to co-sponsor this reform legislation – or allowed a House floor vote on this critically important measure.
This month, the national minimum wage debate gained heightened energy when the Congressional Budget Office offered its projections. Increasing the minimum wage, the CBO estimated, would expand earnings for 16.5 million low-wage Americans who currently earn less than $10.10 per hour. With this straightforward legislative action, the CBO projected, 900,000 Americans will be lifted out of poverty.
However, there is less unanimity among economists about the impact of a minimum wage raise upon overall employment. The CBO estimated that raising the minimum wage could reduce employment nationally by about three-tenths of a percent (or 500,000 jobs), a viewpoint trumpeted by Republican opponents. It acknowledged, however, that actual job losses could be somewhat more OR "very slight."
White House Chief Economist Jason Furman and Jared Bernstein of the Center on Budget and Policy Priorities, among others, have advanced a more optimistic viewpoint, declaring that "the overall consensus of economists [is that] raising the minimum wage would have little or no impact on employment."
In light of the high proportion of minimum wage jobs in the service and retail sectors, I believe any reduction in overall employment should be slight. Even if there are some temporary minimum wage job losses, that challenge will be dwarfed by the positive gains – more than 16 million working Americans with more resources to support their families.
That is why I joined Maryland Gov. O'Malley, Lt. Gov. Brown, and the 66 Senate and House co-sponsors in support of Maryland's minimum wage initiatives (SB 331 / HB 295). Assuring a fair day's pay for every Marylander who is willing to work hard is long overdue – and, after considering the facts, I believe most Marylanders will agree.
As a moral society, we must face this central economic reality. A neighbor working full-time at minimum wage earns only $14,500 per year – less than the poverty line. Nationally, nearly two-thirds of these minimum wage workers are women – and a raise in their pay would lift more than 8 million children up in life.
The majority of minimum wage workers are Caucasian (57 percent), but it should surprise no one that minorities are disproportionately represented: one out of every six is African American, and one out of five is Latino. Most minimum wage workers are not teenagers earning spending money. Eighty-four percent of these workers are older than 20.
There is a strong social justice element to our cause. Yet, all of us have a very practical stake in raising the minimum wage. Since minimum wage workers have limited income to spend in our consumer-driven economy, poverty wage jobs continue to be a substantial drag upon the expanded economic growth ALL of us need. Experts like the Economic Policy Institute have concluded that raising Maryland's basic wage would directly benefit 455,000 working neighbors and generate $456 million in new economic activity.
Moreover, when a neighbor is working at poverty wages, we all must pick up the cost of their food stamps, subsidized housing, healthcare, and related social welfare costs. What that means is that through our tax dollars, we all are subsidizing employers who pay only the current minimum wage.
There is a better, more humane, way – legislation that affirms our work ethic as a society. Increasing the minimum wage in stages to $10.10 per hour – and lifting more of our neighbors above the poverty line – should result in additional taxes paid by low-wage workers and reduce the upward pressure on social welfare costs.
To their credit, many business owners agree. The Economic Policy Institute reports that 65 percent of business owners polled in April 2013 believe a higher minimum wage will result in an increased demand for their products and will help to reduce dependence on taxpayer-funded programs focused on assisting lower wage earners.
It is time to move beyond an economy increasingly devoted to poverty-level wages. Hard-working Americans deserve a raise.
U.S. Rep. Elijah Cummings represents Maryland's 7th Congressional District in the United States House of Representatives.