NYT | Bill Pushes for Increase in Wages

Rebecca Berg | New York Times | June 7, 2012

WASHINGTON — Representative Jesse L. Jackson Jr. tried to give new vitality to the issue of the federal minimum wage on Wednesday, coming at the debate with a fresh angle: that raising it might encourage Americans to spend more and, thus, help stimulate the nation’s struggling economy.

At a Capitol Hill news conference, he said the economy would be bolstered by increasing “the purchasing power of millions of low-income and low-wage workers, and one proven and effective way of doing that is to raise the federal minimum wage.” He has introduced a bill that would immediately increase the minimum wage by $2.75, to $10 an hour from $7.25.

The argument in favor of raising the minimum wage as a form of economic stimulus goes to the heart of the debate in government and business spheres about whether more spending needs to be part of the prescription for strengthening the economy.

It also alludes to an underlying bitterness about income inequality that has intensified during the recession and subsequent recovery efforts.

“We’ve bailed out banks, we’ve bailed out corporations, we’ve bailed out Wall Street, we’ve tried to create sound fundamentals in the economy,” Mr. Jackson, Democrat of Illinois, said. “Now it’s time to bail out working people who work hard every day and they still only make $7.25. The only way to do that is to raise the minimum wage.”

An increase in the federal minimum wage was last approved in 2007, when Congress voted to raise it from to $7.25 from $5.15 over two years. Eighteen states now have minimum wages in place that exceed the federal minimum.

At face value the federal minimum wage is the highest ever, but proponents of raising it argue that past minimum wages should be considered as adjusted for inflation. That would make 1968, when the minimum wage was nominally $1.60, the highest, at roughly $10 an hour in 2012 dollars.

As of last year, 5.2 percent of hourly paid workers in the United States, or about 3.8 million people, were compensated at or below the federal minimum wage, according to the Bureau of Labor Statistics.

In the past, raising the minimum wage has been anathema to many Republicans and some business interests, like the National Restaurant Association, which argued in 2007 that an increase would cost jobs. Economists, meanwhile, disagree about the effects on the job market.

It might seem counterintuitive, that Democrats would decide to raise the issue again now, with Republicans in control of the House and Congress already distracted by the campaign season. On Wednesday, though, Representative Dennis J. Kucinich of Ohio told reporters that it was “precisely because it’s an election year” that the time is ripe for a renewed debate. Mr. Kucinich, a former Democratic candidate for president, said “President Obama could guarantee his election” if he came out in favor of Mr. Jackson’s proposal.

As a candidate for president in 2008, then-Senator Barack Obama said he would support raising the federal minimum wage to $9.50 by 2011. Mitt Romney, the presumptive Republican nominee for president this year, has said he sees no need to increase the minimum wage at this time. Both men support a mechanism that would automatically adjust the federal minimum in proportion to increases in the Consumer Price Index.

Speaking to the press Wednesday, Ralph Nader, the consumer advocate and himself a former candidate for president, said,

“This is a unifying issue in our country at a time where there are few declared unifying political issues.”

He added, “I don’t think a conservative Republican worker in Walmart making $7.75 an hour is going to say that his or her ideology prevents them from supporting a $10 minimum wage.”

But Republican or not, some workers take issue with such an increase.

A few blocks from the Capitol on Wednesday, Ryan Young was at work, dragging a garden hose toward a planter. As a supervisor for a landscaping company, Mr. Young earns about twice the federal minimum, but has worked for much less. “If you raise the minimum wage, that cost gets spread out somewhere else,” he said. “I think the market should determine wages, rents, pretty much everything.”

For now, though, the debate might be moot: A spokesman for Mr. Jackson made clear that the congressman’s main aim is to reinvigorate discussion on the issue.

With the divisive political climate in Washington, the spokesman, Frank E. Watkins, said he doubted the bill would come to a vote. “In fact,” he said,” I’m fairly certain that it won’t under this Republican Congress.”

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