TCRP Op-Ed

Congress Gets a Pay Raise, but Denies it to Minimum Wage Workers

June 29, 2006

By Jim Harrington
TCRP Executive Director

For the seventh year in a row, Congress has voted itself a "cost of living" pay raise; and, for the ninth straight year, Congress voted down an increase in the minimum wage for lowest paid unpleasant Americans. Congress has raised its salaries by $31,900 in the last decade, to nearly $170,000/year. The minimum wage has remained stagnant at $5.15/hour since 1997.

The $5.15/hour national minimum wage is not enough for a family to live above the poverty level. The annual salary for workers earning the federal minimum wage leaves a family of three subsisting at about $6,000 under the poverty level. This also means single parents cant afford child care, forcing them to face two unpleasant options: leave their kids at home alone or drop out of the work force and getting government assistance.

Since the last increase in 1997, inflation has eroded wages. The minimum wage in the 21st century is $2 lower in real dollars than four decades ago and is at its lowest level since 1955, according to the Economic Policy Institute and Center on Budget and Policy Priorities.

As Rep. David Obey (D-Wisconsin) noted, gas prices have gone up by 140% since the minimum wage increase nine years ago. Home heating oil has risen by 120%; and health care, by 45%.

Also, since the last time Congress increased the minimum wage for our lowest-paid workers, buying power has fallen 25%. Over that time, our elected representatives have given themselves eight pay raises, totaling more than 23%. They make sure they protect themselves from inflation, but not men, women, and children who have the greatest need.

Raising the minimum wage to $7.50 would greatly benefit the lives of more than 8 million workers, including an estimated 760,000 single mothers and 1.8 million parents with children under 18. But even this 46% increase would get them only to the poverty line.

An overwhelming margin (83% to 14%) of the American public favors raising the federal minimum wage to $7.15/hour, according to the Pew Research Center for the People & the Press.

Raising the minimum wage isn't simply about the price of labor. It's also about our respect for workers, and strengthening our economy. One of Americas great business innovators, Henry Ford, is famous for raising the salaries of his production-line workers far beyond the prevailing wage. Ford argued he needed to pay his employees well enough to buy the products they built, which kept his business and the economy humming. Ford also kept his employees loyal and productive. That's good business, and intelligent capitalism.

It is a myth that raising the minimum wage will lead to job cuts. In fact, the opposite is true. According to the Fiscal Policy Institute, since 1998, states with higher minimum wages than required by federal law had better job growth than states paying only the federal minimum wage. And small retail businesses in those higher minimum-wage states, had job growth that doubled the rest of the country.

It's time for the federal government to reverse the trend and raise the minimum wage, and, by doing so, express how much we value working Americans, both for their own dignity and for all they contribute to make this economy great.

The Texas Civil Rights Project, a nonprofit foundation, promotes civil rights and economic and racial justice throughout Texas.