Transcript: Q&A w/ Sen. Tom Harkin & Rep. George Miller on raising the federal minimum wage – Jan. 14, 2014

Partial transcript of Q&A with Sen. Tom Harkin (D-Iowa), Rep. George Miller (D-California), and Jason Furman, Chairman of the White House Council of Economic Advisers, on raising the federal minimum wage to $10.10 per hour at the Economic Policy Institute on Jan. 14, 2014:

…People have noted that the House of Representatives leadership might not be so friendly to this. At the same time, we recall after the Gingrich revolution, there was a minimum wage increase in the House and there was an increase of the minimum wage under President George W. Bush. So, would you care to address what is the path forward for $10.10?

Rep. George Miller (D-California):
Well, I think the path forward is to get to a place where you can get a vote and that may mean more than one vote. We’ve had some experience with this. But I think between now and the end of this session of the Congress, there will be a majority of the members of the House – Republicans and Democrats – that will support the minimum wage. Their leadership may struggle to keep them from having to record that vote or acknowledging that fact by preventing them from coming to the floor but I don’t think that that’s a sustainable strategy. We had a test vote just on the procedural matter – a motion to re-commit – all of the Democrats, all the Republicans opposed it. Just in that short time since that vote, Republicans have been suggesting that maybe there’s a way they can support this. They would like to support it. Some have come on and said if there was a vote they would support it. So I think that’s part of the process.

The Senate, obviously, is struggling with trying to get a vote in the next few weeks and hopefully they will. I don’t know that will be successful…but at the end of the day, I do not think you’re going to ask your caucus to take into that election the killing of the minimum wage in this economic situation that people have.

You know, as I point out about the impacts of the recession. There’s a lot of families who have minimum wage workers in them, who also have college degrees, who also have other aspirations and never thought they would be there, and they come home at night, and they explain what it means to work on a minimum wage and the family starts to see that.

So I think if you want to continue to burn your brand, stay opposed to the minimum wage because you’re going to burn it with a big cross-section of middle America that now understands this issue maybe in a fashion, which they haven’t understood in the 25 or 30 years because of the general downward pressure on wages and the experiences of families that don’t quite meet where they thought they were going to be just a few years ago. So, I’ll take the politics on this side.

Sen. Tom Harkin (D-Iowa):
Sen. [Harry] Reid has agreed that right now, we’re in this week and then there’s a week break. This week we’re doing the omnibus, which is interesting. We got that done. We’re trying to get unemployment compensation through obviously this week also. Then a break. So assuming those are taken care of, it’s his intention or our intention to bring up a minimum wage bill sometime soon after we get back from next week’s break. Now, whether or not we get the 60 votes or not, I don’t know. But we’ll try, we’ll see. And if we don’t get it on the first round, well, then we’ll come back and try it again. They’ll be more than one opportunity for Republicans in the Senate to change their minds.

Lawrence Mishel, President of the Economic Policy Institute:
You know, when I hear the discussion about the minimum wage, some people disparage it as only affecting a small group of people, and they look at the people who are only hurting that much now. In fact, you need to be looking at the number of people that would be affected by the increase up to $10.10 directly plus those above that. There’s a lot of good research that shows when you raise the minimum wage, people with wages above that level get a bump up too. We estimate that 27 million people will benefit from the proposal on the table right now, and that’s actually a small amount because many of the states are already at that level, and especially with California passing a minimum wage increase, that took off 10% of the workforce in the country from benefitting from this. So, this is not a small boutique issue. This is something that matters to millions of workers and millions of families.

…I was talking to Sen. Alexander who complained that much like Republicans are complaining over the current debate over unemployment insurance that there would probably be not an opportunity to offer amendments to the bill. So I’m wondering what your response is to that and will there be an opportunity for them to offer amendments? And I also wanted to ask is there room for negotiation on the tip credit?

Sen. Tom Harkin (D-Iowa):
As I said, we’re always willing to negotiate on things. But we already have, as you know, in terms of the implementation of it and the addition of the expensing write-off for small businesses for capital equipment. So we already put that in there, which Republicans insisted on. We said, “Okay, fine.” We can’t just keep going back to the well getting nickeled and dimed all the time alone on this. At some point, you’ve got to say, “Wait, we got a package here.”

And on the tip, I mean, this is a 10-year phase-in. It’s $2.13 an hour. We’re just trying to bring it up to 70%, as you know, of the minimum wage. I don’t think that’s too much to ask for tip workers in our country.

But you know what? We’re always willing to look at the offers that people have but I can assure you that we’re just not going to be going back to the well and being, as I said, nickeled and dimed and brought down to where you just have something that still locks in a poverty wage. That’s just not going to happen.

…Senator, you said you’re firm on the number $10.10 and that’s something you don’t want to negotiate over. Similar question. I’m wondering if you’re equally firm on the indexing piece of this. Is that something that your Republican colleagues have asked you to consider dropping and is that something you would negotiate or not negotiate over?

Sen. Tom Harkin (D-Iowa):
Well, as a matter of fact, a couple of Republicans have offered an indexing clause but they want to index it, I think, at $9 an hour. As I said, that locks in a sub-poverty wage forever. It’s a little outrageous to say, “Well, we’re for indexing; we just don’t want to index it at that level.” So I think we’ve already gotten over the hurdle of indexing – okay? – as some Republicans have already agreed with that concept. The question is at what level? And again, I think we’re absolutely firm that we’re not going to lock it in at sub-poverty level.

…How exactly did you arrive at $10.10? Were there certain qualifications that it had to meet?

Sen. Tom Harkin (D-Iowa):
My good friend, George Miller, said if that question is asked, he said, “I want to answer that question.” [Laughter]

Rep. George Miller (D-California):
…I think we’re trying to get above the historical levels. I mean, that’s what you have to do in over a period of time with indexing. You could stay there. There’s no point in us having one peak and then dropping everybody down because they can’t stay with the economy, and $10.10 is the jumping off point that if you’re going to do that, to recover that historical level. Otherwise, you’d end up where we are today. We passed it in 2007 and now we’ve sunk once again, and that’s just not good for the economy.

Jason Furman, Chairman of the White House Council of Economic Advisers:
And the President endorsed this proposal and part of why he endorsed it was looking at that graph we looked at before, which is if you take someone who is working full-time, look at their wages, add what they get in terms of tax credits, you know, does that place them above the poverty line and meet that basic promise that if you work full-time, you shouldn’t have to raise your children in poverty. And $10.10 is the level that does achieve that promise.

Sen. Tom Harkin (D-Iowa):
And when we started working on this a couple of years ago, in just discussing it with economists and everyone, you know, maybe some of us wanted to go to $10.75, which is the high point in 1968 but we decided – as Jason said – we wanted to get above the line that would be above the poverty line. We felt that that was something that we could do that would, I think, would be doable. If we shot for $10.75, it might be a little bit too high. Just trying to think about the votes and how the votes would come. So that’s really how we arrived at that $10.10. It gets you above that line but it’s not so high that we thought businesses would revolt against this. And I still think more and more businesses are going to come onboard this.

Lawrence Mishel, President of the Economic Policy Institute:
And I’d just like to add that between 1968 and now, the productivity of the nation has doubled. We can afford that much more. It’s also true that back in 1968, half of the low-wage workers didn’t have a high school degree; now it’s around 20%. The workers at the bottom are far more educated, far more skilled, are older, are far more productive than they were back then. The nation is far more productive, yet we’re struggling to get the wage back to what it was all the way back then…

Sen. Tom Harkin (D-Iowa):
…I don’t think there’s anyone here who doesn’t support the Earned Income Tax Credit…It’s a vital part of this effort. But there are some who say, “Well, we ought to put more into that rather than raising the minimum wage.

Just keep two things in mind.

One, the Earned Income Tax Credit is basically a child support system. If you have children basically or adults you have to have custody or to have children in order to qualify for Earned Income Tax Credit. Number one.

Number two, it comes once a year, and people have to live week to week, month to month.

And so while the Earned Income Tax Credit is a part of this – I’m very supportive of it – it can’t be the whole thing for those two reasons.

…Mr. Furman, there are about 2 million people who work for federal contractors right now who are making, you know, low wages in places like – you know, people who don’t work directly for the federal government but they work for the contractors who have contracts with the federal government. What’s the prospects for an executive order or some executive action to help these workers? I mean, these are folks who are frying the chicken and cleaning up at the Reagan building; they’re working at Union Station. They’ve been protesting. They’ve been on strike even…

Outside of legislative action, what can the executive do to help these folks out?

Jason Furman, Chairman of the White House Council of Economic Advisers:
…There’s no doubt that the biggest thing we could do is something legislative. Larry put the number, I think, at 27 million people. We estimated it’s 18 million direct and 11 million indirect above the minimum wage. It’s a very reasonable estimate. So I think the biggest question that we should all be asking ourselves is what is the best way to advance and get to that goal because that’s where we want to get to ultimately is everyone having that floor – that poverty floor…

…I want to pose sort of a devil’s advocate question to you. In an economy that for the last 30 years put a premium on financial services really at the expense of manufacturing blue collar jobs, what if the problem with minimum wage isn’t the allocating of money, if we would all like to believe the economy is more than just moving money around? What if the problem with minimum wage is that we don’t have the quality of jobs and employment to make the system work and we can change the minimum wage all we want but if we don’t have that critical mass of quality work that’s actually improving the economy and not moving money around, maybe this is just squaring of the circle?

Jason Furman, Chairman of the White House Council of Economic Advisers:
…We choose to have the type of jobs we have in this country. And we could choose to go a lower wage, lower productivity route or we could choose to go a higher wage, higher productivity route. This legislation is about making that second choice and it’s one that our workers are educated enough for and we have more than enough technological infrastructure and equipment for. Our economy can certainly support that choice. We just need to be making that choice.

Rep. George Miller (D-California):
…I hope that the goal of the Congress and of the country is to create better jobs and more of them. I think we have some opportunities now. One because of the change in the energy situation in this country. We see, in fact, direct foreign investment being made in America in manufacturing related to energy. And I think that that’s important.

I think that Congress could do its share with – to have an investment portfolio for this nation that I think is widely agreed upon but will not happen in this Congress.

I think in the negotiations on the appropriations bill that will be coming, the National Institute of Health is still dramatically under-funded. The basic and fundamental research in this country that private companies won’t do. I meet with these people all the time. They’re not going to do research that’s 25 or 30 years away from the market unless you’re Google and you have a lot of loose change around. But they’re not going to do that. But they’ll do it in partnership with universities and with the federal government and using the talent that we have in this country, but we’re not investing in either human capital or in the financial supports for that kind of research.

Clearly, we’re not doing that in infrastructure. We want to engage in world trade and we still are not ready for the next generation of container ships, if you will, so we can be an efficient place to move product and create jobs.

And finally, there’s a lot of discussions about all of the things that small businesses need. Every time the conservative agenda, the right wing agenda against the minimum wage comes up, they throw a small businessman into the bridge to stop the data from becoming public. You know, at the height of the recession, you look at survey after survey of small business and all of the things that the right was saying was wrong with what the government was doing, the business people kept saying “What we really need are more customers.” And we know an increase in minimum wage puts not only more customers but a customer with more resources who will be able to pay their bills, if nothing else, on time and not have to be borrowing money to try to trade off between the rent and the car payment and the transportation costs and all the rest of that.

So, this is really about strengthening – and that’s what mayors and governors are looking at. You’re not going to build these vibrant centers, as I said, if you don’t have well-paid people in the community to create that synergy and energy. And that’s what the data’s starting to show…

Sen. Tom Harkin (D-Iowa):
…On the anniversary of Lyndon Johnson’s speech on the War on Poverty and talked about the Great Society…Now is the time – now, of all times – now is the time not engage in austerity programs. Now is the time for the federal government to be borrowing money. Interest rate is as low as we’ll ever see them. Now is the time for the federal government to be borrowing money and doing what? Putting it out to build the kind of infrastructure platform that our children – my grandchildren and great-grandchildren – will need in the future.

Ben Bernanke just spoke to us last Thursday…and he made an interesting statement. He said you know, so many people say we can’t leave this debt to our children and grandchildren. He said, “I don’t know if it’ll be a debt or not, depends on the economy.” He said there is one thing definitely that we’ll leave to our grandchildren and that’s the infrastructure of this country. What’s it going to be like?

So quality jobs – what if we really were to upgrade our electric grid in this country for the next two centuries…so that we could move to a renewable energy portfolio that is good for the entire country, not just certain segments of the country. That’s a 10-year, 12-year project, billions of dollars. That could be good, quality jobs.

Transportation, high-speed rail. We should have this as a goal as we did to put the man on the moon and bring him back in 10 years. We should have a goal – high-speed rail from Maine to Miami and from Seattle to San Diego – just high-speed rail to move people around in those areas. Long-term quality jobs. Builds a platform of infrastructure for future generations.

And then, there’s the human infrastructure. You mentioned quality jobs. I believe that a person who is qualified by learning to take care of children in their earliest stages of life and to provide early learning experiences for children should be a quality job.

Head Start is one of those. We pay them terrible wages. That should be upgraded. That should be a quality job in our society for taking care of kids or taking care of elderly people. Those should be quality jobs that pay decent wages that have good retirement systems in it.

So, there’s a lot of quality jobs we can do if we can just get off our duffs and forget about this whole austerity thing…

…Former Congressman Jim Jones was on C-SPAN the other day and he responded to the question about why so many members of Congress are just so, I think he used the word, “degrading” and scapegoating and angry about the poor. And Congressman Jones response – he’s with the LBJ Foundation now – was that because so many in Congress have never walked in their shoes or experienced that kind of hardship or seen it first-hand. I’m wondering if you think there’s any way that that kind of mindset could penetrate some of the more vocal critics…?

Sen. Tom Harkin (D-Iowa):
…Getting back to this austerity thing and this attitude thing. We’ve got to fight this. This idea that we’re broke. I mean, how often do you hear people in the Senate, “Oh, we can’t afford this. We can’t do unemployment compensation unless we take it out of disabled payments. We can’t afford to do this.”

We’re the richest country in the world. We’re the richest country in the history of the world. If we’re so rich, why are we so broke? You know, you’ve got to start asking these questions. If we’re so rich, why are we so broke? Why can’t we afford to do these things? Because it’s a misallocation of capital and that capital has to be reallocated.

…I said once jokingly that talk radio hosts should start broadcasting from project houses, from homeless shelters, and go out there and start getting those people into talk radio and let people start hearing what their lives are like. Did any of you read that four or five part series in the New York Times about that little homeless girl? That’s what people have got to start understanding what’s happening in this country to poor people and how they struggle.

…I hate to pick on [Marco] Rubio, but why not? [Laughter] In the speech he gave last week, he said one of the biggest things – one of the best things to get people out of poverty is not a government program, it’s called marriage.

Okay, did you read that story about that little girl in the New York Times? Her parents were married. They were married, but they were dysfunctional. They were dysfunctional parents. So what do we say? Well, because they’re dysfunctional, we just let the kids go. That’s not America. That’s not the kind of America that I was brought up to believe in.

…We got to start putting this in real human terms as to what’s happening to people out there, and the more we do that, the more that we do this in our campaigns, I think we can begin to shift these attitudes that people are using. It’s a harsh attitude…

I’ve been saying lately there’s a harshness that has crept into our political debates. It’s just kind of a harshness. Being hard on people. Especially hard on people that don’t have anything. People hard on people that are at the bottom rung of the ladder. It’s not befitting a great nation. And we’ve got to attack it and just point out that that’s what it is – it’s a harsh attitude, and I think most people don’t want to be harsh. They want to be a little bit more kind, a little bit more loving, a little bit more generous, more understanding that people have tough lives sometimes through no fault of their own, and they need society to respond in a way that helps them be a part of the American dream.

…How would you respond to the classical argument that raising the minimum wage, especially this much, will strap small businesses because they’re going to pay too much in wages and therefore prices are going to go up and then people will have to be laid off and in fact the unemployment level will be harmed rather than helped by this? You know it’s coming. How would you respond to it?

Lawrence Mishel, President of the Economic Policy Institute:
One answer is eight Nobel Prize winners say that’s not really a problem.

Jason Furman, Chairman of the White House Council of Economic Advisers:
I think the answer to your question is…wages have two effects on a business. One is they’re a cost for a business. But the other is they help attract workers, motivate workers, retain workers, and that’s a benefit side for the business.

And what a range of economic studies have found is that these two roughly equal out so that when you look at the pure labor economics of it, there’s no meaningful evidence of an adverse impact on employment.

And we know that – you know, in economics you like to run a random trial to make some people have a minimum wage and some people not. We have a big diverse country, which throws up those random trials to us all the time just as long as you know how to go out and look for them. And you’ll have one county that raises its minimum wage; the neighboring doesn’t. One state raises it; the neighboring doesn’t.

Originally, Alan Krueger and David Card looked at two sets of counties – one on the border of New Jersey and one on the border in Pennsylvania and observed this. Now, people have gone back and looked at hundreds of these pairs of counties or states, and you just don’t see employment growing more slowly in the one that raised the minimum wage and in the one that didn’t, and economists interpret that as all of those productivity effects offsetting anything on the cost side…


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