 For those of you who don't know about the Economic Policy Institute, if you think an economy is not performing well unless everybody in it is moving ahead, then we're the kind of think tank for you. If you want authoritative information on living standards, on jobs, wages, income, wealth, poverty, job quality, then we're the think tank for you. If you want to achieve shared prosperity and you want policy solutions for that, policy solutions at the scale of the problem, then we're the think tank for you. And I want to welcome you today to our event on a very important policy, the minimum wage. As everyone knows, there's a lot of discussion right now about income inequality. But sometimes people think this is about some metric, some genie coefficient, some measure that we're trying to affect. That's not true at all. The discussion of income inequality is about whether people are going to move ahead, whether the vast majority are going to share in economic growth. It's about rebuilding the middle class and giving more people access to the middle class. And what does that really mean? Sometimes that discussion is up here and far above what we at EPI think is the core issue, which is to get broad based wage growth. If you had broad based wage growth, you would have better jobs, you'd have a stronger middle class, you'd have a bigger middle class, and more people able to get into the middle class. And why is that the case? What is a middle class family? A middle class family is essentially a family that mostly relies on labor income for its income. They don't have a lot of capital gains and dividends in interest income. They don't get a lot of support from the government in terms of transfer income. They rely on the labor market. It's their jobs and their wages. So getting broad based wage growth is essentially what getting income inequality down means what achieving shared prosperity means. Which leads us to the minimum wage, which is a simple, strong, effective policy for spurring wage growth and for lifting up many people at the bottom and for helping families basically in the bottom 60% of the income scale. So let me just welcome you to this topic. I couldn't be more proud to have at EPI the people we have here. Jason Furman, chair of the Council of Economic Advisors. All the bios are on the web, on the packets. These are well-known people. They won't get extensive introductions here. And we have two great leaders from the Congress. Senator Tom Harkins, representative George Miller. I guess today we can say that both of those are great leaders who unfortunately won't be with us in the next Congress. But they are great leaders on all the issues that we at EPI care deeply about. And nothing would happen, you know, things would not have gone as well as they have or they would have gone a lot worse without the great leadership of these two people. We admire them, respect them, we love them. And really proud to have them here at the Economic Policy Institute. So today we're going to first start off with Jason. He's going to present us some of the facts of the case. And then we'll have Senator Harkins and Representative Miller talk. All yours, Jason. Thanks for coming. Thank you so much for hosting me here. And the Economic Policy Institute just makes such an extraordinary contribution to our economic dialogue and to economic policymaking in this country. And just looking up at that letter that you have and just the decades worth of letters on minimum wage, it's where the best economists in the country turn to both as an outlet to get their ideas out and as a way to organize their support of these issues. And I think the fact that you see such a broad-based list of economists there means that a lot of what I'm going to go through with you today in terms of the economic case for raising the minimum wage is really mainstream and increasingly the consensus view of the economics profession. I think Larry probably had the view well in advance of it being the mainstream and consensus of the economics profession. We at EPI say we're upstream. What we say now is what the mainstream will say later. Fair enough. The other thing about that list is as impressive as it is intellectually, none of them have a vote in the House and the Senate. None of them can make anything happen. Fortunately, we have Senator Harkins and Congressman Miller who have championed this issue for just as long or longer than anyone else has and are really going to be the reason that it's going to happen. So I wanted to start out by just putting a little bit of historical context on the minimum wage and showing you, what I think is the single most striking fact about the minimum wage right now, which is that it is below where it was in inflation adjusted terms in 1950. To put some context on the economy since 1950, real per capita GDP is up 242%. Real hourly wages are up 65%, which is disappointingly small given that GDP growth and that's another story, although not an entirely unrelated story. If you look at real per capita household wealth, we only have these numbers since 1952, they're up 298%, and the minimum wage adjusted for inflation comparable to these is down 64 years without a raise for workers at the bottom. That wasn't always that way. The minimum wage was on an upward trend and it reached its peak in 1968 and it's fallen by one third since 1968. And that fact is an important part of the explanation for what we've seen in this economy since the late 60s and there's been a lot of discussion of the 50th anniversary of the war on poverty. The Council of Economic Advisers put out a report and there were a lot of things in that report, but the most important point in it is if you look at the poverty rate and don't take into account public policy, it's actually gone up since 1967, and one of the important reasons for that is when you're cutting the pay for people at the bottom by a third, you shouldn't be that surprised that you're not making a lot of progress on poverty when you just take into account people's wages. The war on poverty, of course, was about a lot of things, including expanding assistance to low-income households, better things that came out of the war on poverty, eventually not initially, better rewarding work through things like the earned income tax credit and nutrition assistance. When you take all of that into account, we have made an immense amount of progress on poverty and that's why it's so important to make sure that we're doing things like extending emergency unemployment insurance, defending a robust nutrition assistance, making permanent a lot of the tax credits we've gotten for the earned income tax credit and the child tax credit, but to really make a lot more progress and to continue to make progress on poverty, we're going to need to raise wages and to raise wages for all workers and one of the important tools we have to help make that happen is raising the minimum wage. The minimum wage doesn't just matter for poverty, it matters for what President Obama has called the defining issue of our time, which is inequality. This graph shows you, there's a lot of dimensions of inequality, this shows you the ratio of women's wages at the 50th percentile to the 10th percentile that very closely tracks the value of the minimum wage and there have been a range of studies which have found that as much as one-third to one-half of increases in certain types of inequality has been due to the erosion in the value of the minimum wage. Inequality, of course, is a much bigger phenomenon as a set of issues very concentrated at the top related to the middle. There's a lot of causes of inequality, but this is one of the important ones, especially for inequality at the bottom. Returning again to poverty, we're now in a place where if somebody works full-time, year-round, and makes the minimum wage, they're going to be paid $14,500. You add the tax credits they get to that and they're still raising their family below the poverty line. We fundamentally think that you want to set a minimum wage so that if you're working full-time, year-round, you're going to be able to raise your family above the poverty line and when you take into account tax credits the $10 and $10 that Senator Harkin, Congressman Miller, and President Obama, all support would take you above that poverty line. We lift 1.6 million people out of poverty and if you look in total, 8.8 million people in poverty would see their wages go up. Federal level has often been a way to encourage states to raise their minimum wages and that what they do in turn encourages us. There's 21 states in D.C. that have higher minimum wages. A lot of states are now indexing to inflation and one of the encouraging developments in the past year is that we've seen four states pass legislation to raise their minimum wages and we'd like to see more states doing that in 2014. There's no reason that anyone needs to wait for Washington to do this. Minimum wage disproportionately benefits women although it benefits an awful lot of men. It's very focused at about half of the benefits go to low and moderate income families. The fact that a third of the benefits go to families between $35,000 and $75,000. I don't think it's a defect in the policy. I think it's one of the strengths in the policy. Those are families that may have a secondary earner working part-time, full-time, at the minimum wage. They need a raise too and above $75,000. That's where a minority of the benefits go but many of those families also could use a raise in this economy. It goes to a wide spectrum of ages only a small amount of it goes to teenagers and it goes to a diverse set of families a lot of them with children. In terms of the case overall on its impact on our economy and jobs one thing just to put it in context is we're among the lowest of countries that are as rich as the United States is even with $10.10 an hour we would still be relatively low compared to many of our peer countries. This is not something that in the historical perspective for the United States would be particularly high and international. It's very manageable and finally wanted to end on a slide that summarizes the research effort that John Schmidt put together. Are you here? Thank you John we show the slide everywhere we go. This shows the range of studies on minimum wage that have been conducted and the impact they have on employment. Some find a negative effect, some find a positive effect, the vast bulk finds zero effect and that's why John correctly summarized it as no evidence of a meaningful adverse employment effect and just a small thing about the economics profession. My guess is a bunch of people found regressions that found plus 15, plus 20. They decided that was crazy so they kept that paper in a desk drawer and it never got published so the publication bias itself is likely to skew those studies in a negative direction even with that publication bias. You still see essentially zero in a meta-analysis. That's the micro labor market economics of it. If you look more broadly, increasing the purchasing power of workers in an economy like the one we have today will at least in the short run provide a boost to aggregate demand and potentially help create more jobs. So in summary, this is long overdue, arguably 64 years overdue to get to where we need to go. Matters a lot for poverty, matters a lot for inequality. A lot of the myths about who it goes to are wrong. A lot of the benefits are very tangible and very large and it's something we need to do. Thank you very much, Jason. I have Senator Harkin. Larry, thank you very much and thank everyone at EPI for all of your sound economic analysis, not only on this issue but so many of our issues that we're confronting lately. And thanks for bringing us together today. It's a great show of unity. Here you have the House, the Senate and the White House all agreeing that this is one of the most important issues that we can deal with and to give a boost to our economy. I'm not going to go into specifics. I think Jason has done some of that and you all know the specifics. But I just want to just focus on a couple things. One, there used to be a consensus in the Congress about dealing with issues like this, about priorities such as minimum wage. At least in our time here, there used to be a universal agreement that people who work hard every day who are taking care of our kids and our elders running the cash registers, stocking shelves at stores, delivering a meal or a cup of coffee. These workers, worker bees out there, are really valuable, valuable to our economy and quite frankly, when you think about it, they're really the ones that make our country run. If I miss a day at work, so no one really, that's not a big deal. But someone who's running that cash register, running that store, doing these minimum wage jobs, they don't show up, things kind of grind down a little bit. So we always agreed that they were valuable and we used to agree that if you worked hard and played by the rules, you could have a good economic stake in our society. You could keep a roof over your head, you could put money away for a rainy day, you could have a secure retirement. But in recent years it's been alarming to see how these fundamental principles and values are being degraded, degraded in our public policies. For many, the new attitude is tough luck, you're on your own. If you struggle, even if you face insurmountable challenges, it's probably your own fault. It used to be, we used to always just hear this on talk radio. Now it's become part of the discourse in U.S. Congress almost every day. We hear how minimum wage workers don't deserve a fair wage because they're not worth $10.10 an hour. Or that, you get this, raising the minimum wage really won't help lift people out of poverty. I come again on that now. If you get more people, more money to take home and put in their pockets, you're not helping them out, get out of poverty. I heard Mr. Rubio say that last week, it's ludicrous on its face. The predominant attitude seems to be that if you're a minimum wage worker, you have to just get a better job. Or maybe work harder. Tell that to the single mother who's working two jobs trying to put food in the table. Figure out how to keep her kids safe and cared for while she's working two jobs. So the Republican Party may not understand the challenges that this single mother is facing, but the American people do. People are speaking up. They're calling for better wages and working conditions. They see our friends and neighbors struggling, falling behind. That's why there's a groundswell of support across the country and even across party lines for a fair minimum wage. And as this pressure continues, as it becomes clearer for raising the minimum wage, and that it's the right thing to do, both for workers and the economy, I'm confident that a strong majority in Congress will see this as something that we must pass. As has been stated, as you know, Congressman Miller and I have introduced legislation for the minimum wage from 7.25 to 10.10 an hour over three years. But there's another part of this that's very important and that is raising the minimum wage for tipped workers, which has not been done in over two decades. When I tell people that the minimum wage for tipped workers $2.13 an hour, they just don't believe it. I actually have a paycheck that I've used, a copy of a paycheck that I've actually used from a worker here in the District of Columbia. And the paycheck, the actual paycheck is for $0.00 and 0 cents. Because after they took out all the withholding and stuff, she got no money. So you had to really upon her tips, well tips may be up one day and down the next, up one, down the next, you can't rely on that. So well, when our bill is fully implemented, the minimum wage will no longer be a poverty wage. It will lift people out of poverty. And the other thing is indexing it so that it can't fall down below that again. Now here again, I want to just give a little warning. There are going to be attempts to lower this from $10.10 down, $8.00, $8.50, $9.00, and then index it. Well that will lock in a sub-poverty wage and index it for the future. Now, again, George and I have worked on this for a long time. And we're willing to negotiate. People say, well it's just your way of the highway and I'm not saying that. We've already negotiated, at least on the Senate side. As you know, we have agreed that the first tranche would go in in six months rather than three months. That was in the Senate bill. We agreed to put in a tax provision for small businesses for expensing of capital equipment. It's fine. We're willing, I think there's some negotiation that can happen on that. But 10.10 is a bottom line. We cannot go below that. As you just heard Jason say, if we had kept up the minimum wage from 1968, it would be about $10.75 an hour. And so to somehow try to bring it below that and lock in a sub-poverty minimum wage for the future is just not acceptable. There are other things we might do. We're always willing to talk, always willing to negotiate. But on this, that's the bottom line. We can't go below 10.10. The new studies that we have say that 4.6 million people would be lifted out of it $6.8 million after the second year after implementation. A lot of statistics. Someone worked up for me and said just for a minimum wage worker, this increase could pay for seven months of groceries, six months of rent, or by an additional 1,600 gallons of gasoline a year. So people say it doesn't make a difference. That's a real difference in a person's life. So again, we think that the American people are calling on us to do this. Clearly and unequivocally, the pressure will build. I know people say, well, can you get something done like that in an election year? Well, it may be better in an election year than in the other year. We saw that happen in 1996 when we were both here. We both worked on that in 1996. And the pressure, when the Republicans had the House and the Senate, President Clinton was the President, but we got that through then because of pressure built. And Republicans didn't want to be out there on the end of that line saying no. I think that's going to build during this year, too. And I believe that we can actually actually get this done. So I'm very optimistic about it. It's going to take a lot of hard work, but I'm glad that we're all together on it now. We've got the data to back it up, and hopefully we can get this done. And now I'm going to turn it over to, you see, when I announced my retirement, I said, you know, Pete, so how are you? I said, well, yeah, you've got good people like Miller here. He's going to stay around. I said, these young guys, these young guys are around here. They're going to stay. But anyway, I guess I should be saying this because I am retiring. But we're going to miss George Miller and we're going to miss his leadership greatly on this and so many others. Tom, thank you very much. And thank you for those nice comments. I didn't want to miss you, so I thought I'd go with you. It's a little bit like that, the fairy tale of Billy Goat Gruff, you know, you don't want me. You want my brother. He's got much more meat on him. But I'm going to miss the Congress. And I'm certainly going to miss all of the people in this room who are stalwarts and progressive politics. But I'm delighted to be here this morning. I thank EPI for pulling this forum together, for pulling the economists together to really change the debate that most people will believe is still stuck. And in time, 15, 20 years ago, when they were able to present the idea that an increase in the minimum wage was a hostile act against the economy of the United States of America, I think these economists have proved, the studies have proved that you just, that just is no longer born out. That's rhetoric. People are clinging to it desperately in some parts of the business community, in the ideological communities. But it just isn't supported by the evidence. And Jason, thank you so much for pulling this together and the support of the White House and I think that the announcement by the President that he wants to get directly involved in the discussion of inequality in this country, on the economic base of this country is really, really important. I think it sets the stage for a broader consideration by the American public of what exactly we're talking about with an increase in the minimum wage. You've heard the reasons. You see the charge. You've looked at the studies and it becomes pretty clear. I think what's different this time in terms of, I think in terms of getting our votes and getting this to the President's desk for his signature that the scars of the last recession have changed a lot of thinking in the American public. There's people who are working at $15 and $20 an hour. There's people who are earning $75,000, $80,000 a year and they look at somebody who's making a minimum wage and they just don't know how in the hell they can even exist. And I hear it all the time in my district. I represent a pretty good cross-section of the California economy and I hear people who are earning many times the minimum wage just say, I don't know how people could do it. You can't live on this and that's the point. They can't live on that. They can't contribute to the economy of their community and this is why governors and mayors and others are thinking if I'm going to have a vibrant community in my city or in my state and I want economic growth somehow we have to get more money on the main street and poor people don't put a lot of money in the main street and I think people now recognize that the minimum wage is one of the tools that we have to use and the idea that you still need to survive in your business a wage based upon 1950 wages that this is your business plan in 2014 your business plan is you're going to continue to pay 1950 wages that's a hell of a deal if you can get away with it but you shouldn't be able to get away with it because you're just visiting poverty and problems for those workers and in many instances for their families and certainly in most of these families for their children and so this becomes an imperative that we have to do this as a nation there's no other way to lift it up Jason's put out the chart that shows we take the combination of the benefits and the wages and you don't get above the poverty line the fact of the matter is most of the people who pose the minimum wage also pose the benefits that's why the benefits aren't there today so they don't want to help people who can't earn a sufficient wage to support themselves who go to work every day bust their tail to provide services or product or whatever to the community they don't want to uplift them up with additional benefits but they won't help them with the wages talk about putting people in a trip box here where they can't get out of it even though they get up every morning and go and do that job and a lot of times when you're walking through your community you'll see people doing jobs and you might say a little prayer thank God I don't have that job because that's a tough difficult dirty job and yet there's some suggestion by the opponents of increase and minimum wage that those people gain at those 1950 wages some people talk about as Jason pointed out the 1968 wages that's sufficient for your son and daughter that's sufficient for your spouse I don't think so and that's what I think people now recognize because their wage isn't a great wage today but you know you have a combination of those who won't help them out with governmental assistance to keep them above poverty and you have those in the corporate world and some of the largest corporations in the world that just decided they were going to take more they're just going to take more for themselves for the shareholders for the for the founders however they deviate up there and they're just going to continue to take more and not help out the people that allow them to be rich through their hard work they've assembled enough poor workers to make themselves rich so this isn't just an economic argument this is an opportunity and I think what's happening and I see the debate this is taking place in many cities in California and in the state of California you see the debate in the community a recognition that this is really about our community this is about what are the resources going to be what are the services that people are going to buy when we did the minimum wage in 2007 Walmart supported it and said because their customers didn't have enough money to buy the necessities this year they don't know they don't know and then you see their competitors in the same business saying we want to invest in our workers because we're interested in worker retention we want a we want a talented workforce so when you come into that store you get services you get answers to your questions you get information you need and that'll make you a better consumer the end all in America making a better consumer and that's why I think we're at the right place at the right time but to be here also with this dramatic showing of the underlying data of that this is not a hostile act against the economy this is in fact a reinforcement of the American ideal that you work hard you get it you get it you get a livable wage and our ability to to index this wage our ability to start out at ten dollars and ten cents we cannot we cannot put into law a permanent sub-minimum wage it just that cannot be the hallmark of the American economy that that's how we're going to go forward in this great international competition we're going to bring our sub-minimum wage workers to the effort that's just not fair to them and this cannot be the right answer for a dynamic American economy so I want to thank EPA I want to thank my senate sponsor Tom Harkin and the White House Jason I've thanked him I wish to thank him again I think this is a critical battle that has to be engaged in on a daily basis if we're going to get this country right-sided up with a fair sharing of the wages with a fair sharing of the wealth in this country so families can thrive not simply exist thank you well thank you thank you very much for that I guess senator Harkin well everyone has referred already to this letter which I failed to mention at the beginning we are releasing today some of the top-line names not all the names of a letter written by economists to the congress and the president are urging a 10-10 minimum wage this letter got the support of seven Nobel laureates in economics eight former presidents of the American Economic Association and all of my staff I solicited these names along with Larry Katz from Harvard who helped organize it and E.P.I. circulated the names as the center for economic and policy research Dean Baker is here who helped with that and I thank them very much I also want to shout out NELP Judy Conti National Employment Law Project which takes the lead in coordinating advocacy on behalf of the minimum wage so I urge people to go read the letter read the names all the economists watching live on over the internet or on c-span later go to the website and sign up too you have to have a Ph.D. in economics to sign and it is it is remarkable I mean in in the late 1980s I recall the New York Times editorial board being against the higher minimum wage economists tended to think that many economists not all you know we're not all that enthusiastic about the minimum wage but there's been a sea change of views and I think most epitomized by I approached the Nobel laureates and one said I don't really sign statements but for this I'm going to make an exception and that's pretty unusual and that was not a labor market economist this was someone who does other types of research he wanted to express his support and lend his authority to this effort so we want to now open it up for some questions from the media any first journalists and then we're going to have other questions so are there how do we want to do this Christian we should have people line up it's going to be a little simpler so okay okay anyone from the press who wants to ask a question well let me start off with a question first just to warm it up and I think the big question and this is for our friends from Congress here 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 rise a minimum wage increase in the house and there was an increase in the minimum wage under President George W. Bush so would you care to address what is what is the path forward for 1010 I think that's what inquiring minds want to know well I think the path forward is to get to a place where you can get a vote and that may be more than one vote we've had some experience with this but I think between now and this session of the Congress there will be a majority of 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 it from coming to the floor but I don't think that's a sustainable strategy we had a test vote just on the procedural matter motion to recommit all of the Democrats supported Republicans have been suggesting that maybe there's a way that they could support this they would like to support it some individuals have come out and said if they were to 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 I think in the next few weeks hopefully they will I don't know whether that will be successful or not 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 the situation that people have you know as I pointed 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 and also have different aspirations and never thought they would be there and they come home at night and they explain what it means to work on the 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 the government understands this issue maybe in a fashion which they haven't understood in the last 25 or 30 years because of the general downward pressure on wages and the experiences of families that don't quite meet with where they thought they were going to be just a few years ago so I'll take the politics on this side Senator Reid has agreed that right now we're in this week 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 and then so assuming those are taken care of it's our intention our intention to bring up a minimum wage bill our 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 and we'll see and if we don't get it on the first round well then we'll come back and try it again I mean there'll be there'll be more than one opportunity for Republicans in the Senate to change their minds 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 earning 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 you know plus those above that there's lots of good research that shows that 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 high minimum wage increase that took off 10% of the workforce of the country from benefiting from this so this is not this is not a small boutique issue this is something that matters to millions of workers and millions of families so so last call for any media representatives you want to come up here and ask hi I'm Michael Rose with Bloomberg BNA I wanted to ask Senator Harkin in terms of process going forward on the vote coming up in a few weeks I was talking to Senator Alexander who complained that much like Republicans are complaining over the current debate over unemployment insurance that there is going to be an opportunity for 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 thanks as I said we're always going to negotiate on things but we already have as you know in terms of the implementation of it and the addition of the the the and put that in there which Republicans insisted on we should OK fine we can't just keep going back to the well and getting nickel and dime all the time along on this at some point you got to say wait we got a package here and on the tip this is a 10-year phase in it's 2013 a hour and we're just trying to bring it up to 70 percent as you know of the minimum wage I don't think that's too much to ask for tipped workers in our country But, you know, we're always willing to look at 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, nickel and dime and brought down and to where you just have something that still locks in a poverty wage. That's just not going to happen. MR. VENTRELL. Okay. Any other media questions? Last call, if not? Oh, go ahead. Hi. MR. VENTRELL. Hi. Hi. MR. VENTRELL. Senator, you said you're firm on the number 1010, 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? MR. VENTRELL. Well, as a matter of fact, a couple of Republicans have offered an indexing clause, but they wanted to index it, I think, at $9 an hour. Well, as I said, that locks in a poverty wage forever. So already, they sort of said, 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? Some Republicans have already agreed with that concept. The question is at what level? And we're just, again, I think we're absolutely firm, but we're not going to lock it in at some poverty level. MR. VENTRELL. Thank you. MR. VENTRELL. Thank you. One more. MR. VENTRELL. Okay. I was asking whether that was a line. Yeah. Please come forward. MR. VENTRELL. I'm Sylvan Lane from the Middell News Service, and my question is, how exactly did you arrive at $10.10? Were there any certain qualifications that it had to meet? MR. VENTRELL. Well, we got here. My good friend, George Miller, said, if that question is asked, he said, I want to answer that question. MR. VENTRELL. Okay. We got here because he insisted upon it. No, I think we're trying to get above the historical levels. Yeah, that's what you had to do, and 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 a jumping off point that if you're going to do that, to recover that historical level, otherwise you end up where we are today. We passed in 2007, and now we've sunk once again, and that's just not good for the economy. MR. VENTRELL. Oh, yeah. I mean, 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's working full-time, look at their wages, add what they'd get in terms of tax credits, 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 a level that does achieve that promise. MR. VENTRELL. That's a couple of years ago, and just discussing it with economists and everyone, and maybe some of us wanted to go to 1075, which was the high point in 1968, but we decided, well, we just, 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 be doable if we were shot for 1075, it might be a little bit too high. We were trying to think about the votes and how the votes would come, so that's really how we arrived at that 10.10 and get 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 on board this. MR. VENTRELL. I'd like to just add that between 1968 and now, the productivity in 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 percent. 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. MR. VENTRELL. This is a very modest goal. Senator Harkin got him going. MR. VENTRELL. Let me just say one last thing before we have to leave. I don't think there's anyone here who doesn't support the earned income tax credit. We all support that. 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. The earned income tax credit is basically a child support system. If you have children, basically, or adults, you have to have custody of children in order to really qualify for the 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. VENTRELL. Let me ask Representative Ellison for a question. Representative Ellison is not only my boss, he serves on my board. He's also a great champion of the minimum wage. And co-chair of the congressional progressive caucus and the House representatives. MR. VENTRELL. Yeah, thank you all for your excellent presentation. So important. My question is this, Mr. Furman, there are about two million people who work for federal contractors right now who are making, you know, low wages, low wage workers in places like, you know, people, they 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 the union station. They've been protesting. They've been on strike even. And, you know, I think, you know, in the outside of legislative action, what can the executive do to help these folks out? MR. VENTRELL. So thank you for the question. And there's no doubt that the biggest thing we could do is something legislative. Larry put the number at, I think, 27 million people. We estimate it's 18 million direct and you have 11 million indirect. Above the minimum wages is a very reasonable estimate. So I think the biggest question that we should all be asking ourselves is what's the best way to advance and get to that goal? Because that's where we want to get to, ultimately, is everyone, you know, having that floor, that poverty floor with then the other things on top of that. And that's the question that we are asking ourselves is how can we best advance this effort? How can we make sure that this happens? How can we make sure that there's no one in this country that's paid less than 10, 10 an hour? MR. Any other, any questions from the audience? Want to move to the mic, please? Maybe we can get a few people lined up if, and please stay to who you are and ask your question. Hello. My name is Alicia Saratani. I work with Executive Intelligence Review Magazine. First, I'd just like to thank the two of you for your support on Glass-Steagall. We'll be missed. Thank you, Mr. Allison, Congressman Allison. The good news is we're getting a few more Republicans on board, but you two will be sorely missed. My question, though, I want to pose sort of a devil's advocate question to you. And in an economy that is, for the last 30 years, have gone, put a premium on financial services, really at the expense of manufacturing blue-collar jobs, what if the problem with minimum wage isn't, you know, the allocating of money if we all would like to believe that 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 sort of critical mass of quality work that's actually improving the economy and not moving money around, maybe this is just squaring of the circle. So I wanted to pose that as sort of a devil's advocate to you. And why don't we take the next question, too, so people can respond to both, or take the next few. Don Mathis, Community Action Partnership. Thank you all for a great morning. 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 firsthand, I'm wondering if you think there's any way that that kind of mindset could penetrate some of the more vocal critics, and whether you agree with Congressman Jones, and there's anything we could do as advocates to help get that mindset changed. Let's have your question, too. And then, thank you. Good morning. Mark Sibolsky, Great Teaching, LLC. First, I'd like to salute the two members of Congress here on behalf of educators and kids in schools. But I'll, much they've done over their careers. Gentlemen, thank you so very much. Thank you. Let me play the Devil's Advocate for just a second. The Devil's Advocate, sir. Where's the Devil? Outside. 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 people, the 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 that's coming. How would you respond to it? Why don't we let the response, maybe I didn't let Jason take that last one. Yeah, I was going to say you and Jason, I think, because no, because you had the compilation of the work that you put together for the letter and this. One answer is eight Nobel Prize winners say that's not really a problem. Right. Yeah. Your question is also related to the answer to the woman's question, which is wages have two effects on a business. One is there 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 are 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 in economics you'd like to run a random trial and sort of 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. This is 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. The state raises it, the neighboring doesn't. Originally Helen Kruger and David Card looked at two sets of counties, one on the border in New Jersey, 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 the one that didn't and economists interpret that as all of those productivity effects offsetting anything on the cost side. I think that helped answer the woman's question too which is we choose 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. 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. Okay, Representative Milley you want to take that? Well on the other one obviously I would 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 the Congress could do it share with just having 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 underfunded the basic and fundamental research in this country that private companies won't do with these people all the time. They're not going to do research that's 25 or 30 years away from the market unless maybe you're Google and you have a lot of loose change around but they're not going to do that away. 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 either in the 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 that we can be an efficient place to move a product and create jobs. Finally there's a lot of discussion about all of the things that small businesses need. Every time the conservative agenda and the right wing agenda against the minimum wage comes up they throw a small businessman into the breach to try to stop the data from becoming public. At the height of the recession you looked at survey after survey of small businesses and all of the things that the right was saying was wrong with what the government was doing and 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 transportation cost 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 this vibrant center as I said if you don't have well paid people in the community and to create that synergy and that energy and I think that's what the data is starting to show and that's what these comparisons I remember one of the few comparisons was I think on the border of Idaho and Washington and one community blossomed with a higher minimum wage and the other one people came there to look for the jobs and then they spent their money there I think we're in a very different dynamic in the discussion of this to repeat myself for the third time Senator Harkin? Well I just had on the issue of quality jobs I gave a speech on the senate for the other day you may have missed it that's alright but talking about what was on the anniversary of the Lyndon Johnson speech on the war on poverty I talked about the great society and now is the time now of all times now is the time not to engage in austerity programs now is the time for the federal government to be borrowing money interest rates are 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 are we should say children now my grandchildren and great grandchildren will need in the future we heard Ben Bernanke just spoke to us last Thursday our policy thing and he made an interesting statement he said you know it's a lot of people say we can't leave this debt to our children and grandchildren he said well I don't know if it will be a debt or not depends on the economy we said there is one thing definitely that we'll leave with it to our grandchildren and that's the infrastructure of this country what's it going to be like so quality jobs I mean what if we really were to upgrade our electric grid in this country for the next two centuries and put that for private it's not a government job it's sort of like you know you get private country to just redo the whole electric grid so that we can move to a renewable energy portfolio that is good for the entire country and 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 I said we should have 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 Seattle to San Diego for most of it just high speed rail to move people around in those areas long term quality jobs it holds 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 DENT of 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 paid 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 to do if we just get off our docks and forget about this whole austerity thing we've got to keep grinding things down there's education George mentioned just biomedical research I was involved in the 90s as the chair of the appropriations subcommittee I was chair or ranking member one or the other that funded that well it did in that case because I had our own inspector or me and that was kind of nice but we put $3 billion into mapping and sequencing the human gene $3 billion a recent study that came out of the Betel Institute not a government study showed that in just the last decade as a result of that there's been over $170 billion dollars of private economic activity that's taken place in that I mean these are quality jobs that we could be doing and George is right we need to double the funding for NIH just like Specter and us and others did back at the end of the Clinton administration we doubled the funding for NIH since then it's leveled off, it's flattened out it's actually in worse shape now than it was then taking inflation into account and everything so those are quality jobs now the attitude thing is probably a tougher one how you get to that on the attitudes I remember when I was in college two books came out this was in the late 50s, early 60s one was John Kenneth Galbraith's book called The Affluent America the other book was by Michael Harrington it's called The Other America am I right Ross? Yes and I got to know both of them obviously later on but one book painted the picture of a very affluent one of the richest societies and the other one said yes but there's another part of America out there and so of course Galbraith was basically pointing out that this needs to be done we need to shift some of our emphasis in fact I have a letter in my file from John Kenneth Galbraith to Lyndon Johnson about the war on poverty and what needs to be done it's very interesting by the way moving towards Harrington's what he thought we had to do how far do I mention that again getting back to the austerity thing and this attitudes thing we've got to fight this this idea that we're broke I mean how often you hear the people in the senate oh we can't afford this we can't do unemployment compensation unless we take out disabled payments we can't afford to do this we are the richest country in the world we are the richest country in the history of the world well first so rich why are we so broke you got to start asking these questions first so rich why are we so broke why can't we afford to do these things because it's the misallocation of capital and that capital has to be reallocated and so I don't know if I better answer on the attitudes I said once talk radio show hosts should start broadcasting from from project houses from homeless shelters and go out there and start getting those people on the 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 someone said well I remember you know I don't hate to pick on Rubio but why not speech he gave last week he said one of the biggest things Jayce one of the best things to get people out of poverty is not a government program it's called marriage do 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 and 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 that you know I have a history in this and we all do but we just got to start getting some of these esoteric arguments I remember Dale Bumpers used to always say let's get the argument down out of the hay mile where the cows can actually eat the hay I don't know what he meant by that one of those Arkansas things or something like that but I think what he meant was we get those esoteric arguments we got to start putting this in real human terms as to what's happening to people out there and the more that we do that and 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 I said the other day I'm going to end this but I've been saying lately it's a harshness that is 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 in our country don't want to be harsh they want to be a little bit more kind and a little bit more loving and just more understanding that people have tough lives through sometimes no fault of their own and they need society to respond in a way that helps them be a part of the American dream that sounds like a good way to end it thank you very much thank you all for coming stay in touch www.epi.org