Pay Workers a Living Wage Act
Senator Bernard Sanders (I-VT), Rep. Keith Ellison (D-MN), and Rep. Raul Grijalva (D-AZ)
The Pay Workers a Living Wage Act phases in a $15 minimum wage by 2020 over 5 steps, increasing to $9 in 2016, $10.50 in 2017, $12.00 in 2018, $13.50 in 2019, and $15 in 2020. After 2020, the minimum wage will be indexed to the median hourly wage. The tipped minimum wage will be gradually eliminated.
• No one working full time should be in poverty. It is time to pay workers a living wage of at least $15 an hour.
• Roughly 62 million U.S. workers make less than $15 per hour, including more than 50% of African-American workers and close to 60% of Latino workers. About half (46%) of workers making less than $15 per hour are age 35 or older.
• American workers are among the most productive in the world, but in most industries the share of revenues going to wages has dropped, while the share going to profits has soared. If the minimum wage had been raised since 1968 at the same rate as inflation and productivity -- i.e., the rate at which the average worker produces income for the employer -- it would be $20 per hour.
• Studies have found that if the minimum wage workers saw the same massive increases in income that the richest 1% have had since the 1970s, the lowest-paid worker in America today would be making over $28 an hour.
• Seattle, San Francisco, and Los Angeles have already raised their minimum wage to $15. Similar increases are being considered in other cities and states across the country, including: Washington, DC; Sacramento, CA; Olympia, WA; Kansas City, MO; Delaware; and Massachusetts.
• A national poll released in January 2015 showed that 63% of Americans -- representing all demographics -- support raising the federal minimum wage to $15 per hour.
• The National Employment Law Project (NELP) conducted an extensive review of research and studies related to the impact of a $15 minimum wage. The results showed no negative impact on employment levels or job growth, but a $15 wage would have a substantially positive impact on the local economy, as increased earnings result in boosts to consumer spending, and as businesses benefits from reduced employee turnover and increased productivity and customer satisfaction.
• Specific to the fast food industry, which employs 47% of all minimum wage workers, a University of Massachusetts-Amherst study concluded that an increase to a $15 minimum wage could be fully absorbed by the employers without resorting to cuts in employment levels, lowering the average profit rate, or reallocating funds from other areas of operation.
• U.S. taxpayers are bearing the costs for those employers that are not paying their employees a living wage. Minimum wage workers are enrolled in public assistance programs at more than twice the rate of the overall workforce. More than half of all fast food workers receive public assistance, which cost taxpayers $7 billion in 2013, according to researchers at UC Berkeley’s Labor Center.
• In January 2014, the community of SeaTac, Washington increased their minimum wage to $15. Since then, the unemployment rate in SeaTac has dropped from 6.3% in January 2014 to 4.6% in April 2015. Before the increase, local employers warned that there would be lay-offs and shutdowns as a result; however, many of these same local business owners have instead seen significant growth and expansion since the minimum wage was increased.
Jul 21 2015
ECONOMISTS IN SUPPORT OF A $15 U.S. MINIMUM
WAGE AS OF 2020
We, the undersigned professional economists, favor an increase in the federal minimum wage to $15 an hour as of 2020. The federal minimum wage is presently $7.25, and was most recently increased in 2009. We also support intermediate increases over the current federal minimum between now and 2020, such as a first-step raise to $10.50 an hour as of 2016.
The real, inflation-adjusted, value of the federal minimum wage has fallen dramatically over time. The real value of the federal minimum wage peaked in 1968 at 10.85 an hour, 50 percent above the current level. Moreover, since 1968, average U.S. labor productivity has risen by roughly 140 percent. This means that, if the federal minimum wage had risen in step with both inflation and average labor productivity since 1968, the federal minimum wage today would be $26.00 an hour. (References for all data cited in this petition can be found here: http://www.peri.umass.edu/fileadmin/pdf/resources/Technical_Appendix_15_Minimum.pdf)
If a worker today is employed full time for a full 52-week year at a minimum wage job today, she or he is making $15,080. This is 21 percent below the official poverty line for a family of three. Raising the minimum wage to $15 an hour would deliver much needed living standard improvements to 76 million U.S. workers and their families. The average age for these workers is 36 years old and they have been in the labor force for an average of 17 years. Only 6 percent of the workers who would benefit from this minimum wage increase are teenagers; i.e., 94 percent are adults.
Numerous states and municipalities throughout the United States are already operating with minimum wage standards above the $7.25 federal minimum. Thus, 29 states plus Washington, DC maintain minimum wages between $7.50 and $9.50. These measures cover 61 percent of the U.S. population. The cities of Los Angeles, Seattle, and San Francisco have all established $15 minimum wage standards that, for all three cases, will be fully phased in as of 2021. A $13 minimum wage will be operating in Chicago as of 2019. Other cities, including New York and Washington, DC, are presently considering similar measures. The State of New York is also examining a $15 minimum wage proposal for the fast-food industry.
Opponents of minimum wage increases frequently argue that such measures will mean fewer employment opportunities for low-wage workers because businesses will be less willing to hire workers at the increased wage level. But the weight of evidence from the extensive professional literature has, for decades, consistently found that no significant effects on employment opportunities result when the minimum wage rises in reasonable increments. This is because the increases in overall business costs resulting from a minimum wage increase are, for the most part, modest.
We recognize that raising the federal minimum wage to $15 an hour as of 2020 would entail an increase that is significantly above the typical pattern with federal minimum wage increases. Nevertheless, through a well-designed four-year phase-in process, businesses will be able to absorb the cost increases through modest increases in prices and productivity as well as enabling low-wage workers to receive a slightly larger share of businesses’ total revenues. On average, even fast-food restaurants, which employ a disproportionate share of minimum wage workers, are likely to see their overall business costs increase by only about 2.8 percent per year through a four-year phase in to a $15 federal minimum wage by 2020. That means, for example, that McDonalds could cover fully half of the cost increase by raising the price of a Big Mac, on average, by 7 cents per year for four years—i.e. from $4.80 to $5.08. The remaining half of the adjustment could come through small productivity gains or a modestly more equal distribution of the increase in revenues generated by the U.S. economy’s overall rate of economic growth.
The economy overall will benefit from the gains in equality tied to the minimum wage increase and related policy initiatives. Greater equality means working people have more spending power, which in turn supports greater overall demand in the economy. Greater equality also means less money is available to flow into the types of hyper-speculative financial practices that led to the 2008-09 Wall Street crash and subsequent Great Recession.
Moreover, the overwhelming factor determining employment opportunities for low-wage workers is macroeconomic conditions—whether the economy is growing or in a recession. Thus, in 1968, when the U.S. minimum wage reached $10.85 in real dollars, the overall unemployment rate was 3.6 percent. By contrast, during the depths of the 1982 recession, the real value of the minimum wage had fallen to $8.22 while unemployment peaked at 10.8 percent.
In short, raising the federal minimum to $15 an hour by 2020 will be an effective means of improving living standards for low-wage workers and their families and will help stabilize the economy. The costs to other groups in society will be modest and readily absorbed.
Signers (Institutional listing for identification purposes only):
- Randy Albelda, Ph.D., University of Massachusetts, Boston
- Lluis Rodriguez Algans, CNT Trade Union
- Peter Arno, Ph.D., University of Massachusetts-Amherst and Lehman College, City University of New York
- Michael Ash, Ph.D., University of Massachusetts-Amherst
- M.V. Lee Badget, Ph.D., University of Massachusetts-Amherst
- Brook K. Baker, J.D., Northeastern University School of Law
- Nesecan Balkan, Ph.D., Hamilton College
- Avraham Baranes, Ph.D., Rollins College
- David Barkin, Ph.D., Universidad Autonoma Metropolitana-Xochimilco
- Deepankar Basu, Ph.D., University of Massachusetts-Amherst
- Lourdes Benería, Ph.D., Cornell University
- Peter H. Bent, University of Massachusetts-Amherst and University of Oxford
- Cyrus Bina, Ph.D., University of Minnesota
- Ron Blackwell, Chief Economist, AFL-CIO (Retired)
- Marc Blecher, Ph.D., Oberlin College
- Eileen Boris, Ph.D., University of California-Santa Barbara
- Howard Botwinick, Ph.D., State University of New York-Cortland
- Roger Even Bove, Ph.D., West Chester University
- James K. Boyce, Ph.D., University of Massachusetts-Amherst
- Michael Brün, Ph.D., Illinois State University
- Robert Buchele, Ph.D., Smith College
- Antonio Callari, Ph.D., Franklin and Marshall College
- Al Campbell, Ph.D., University of Utah
- Jim Campen, Ph.D., University of Massachusetts, Boston
- Michael Carter, Ph.D., University of Massachusetts, Lowell
- Scott Carter, Ph.D., The University of Tulsa
- Shouvik Chakraborty, Ph.D., University of Massachusetts-Amherst
- John Chasse, Ph.D., State University of New York, Brockport
- Ying Chen, University of Massachusetts-Amherst
- Robert Chernomas, Ph.D., University of Manitoba
- Kimberly Christensen, Ph.D., Sarah Lawrence College
- Alan B. Ciblis, Ph.D., Universidad Nacional de General Sarmiento
- Peter Cole, Ph.D., Western Illinois University
- Bruce E. Collier, Ph.D., Association for Social Economics
- James Crotty, Ph.D., University of Massachusetts-Amherst
- Stephen Cullenberg, Ph.D., University of California, Riverside
- Jane D’Arista, Political Economy Research Institute
- Flavia Dantas, Ph.D., SUNY - Cortland
- Paul Davidson, Ph.D., University of Tennessee
- Erik Dean, Ph.D., Portland Community College
- Carmen Diana Deere, Ph.D., University of Florida
- George DeMartino, Ph.D., University of Denver
- Gregory DeFreitas, Ph.D., Hofstra University
- Alan Derickson, Ph.D., Pennsylvania State University
- James G. Devine, Ph.D., Loyola Marymount University
- G. William Domhoff, Ph.D., University of California, Santa Cruz
- Peter Dreier, Ph.D., Occidental College
- Thomas L. Dublin, Ph.D., State University of New York, Binghampton
- Gary Dymski, Ph.D., Leeds University Business School
- Peter Dorman, Ph.D., Evergreen State College
- Veronika V. Eberharter, Ph.D., University of Innsbruck
- Barry Eldin, Ph.D., McGill University
- Gerald Epstein, Ph.D, University of Massachusetts-Amherst
- Rudy Fichtenbaum, Ph.D., Wright State University
- Deborah M. Figart, Ph.D., Stockton University
- Alfredo Saad Filho, Ph.D., University of London
- Andrew M. Fischer, Ph.D., Institute of Social Studies of Erasmus University Rotterdam
- Sean Flaherty, Ph.D., Franklin & Marshall College
- Nancy Folbre, Ph.D., University of Massachusetts-Amherst
- Gerald Friedman, Ph.D., University of Massachusetts-Amherst
- Kevin Furey, , Chemeketa Community College
- James K. Galbraith, Ph.D., University of Texas-Austin
- John Luke Gallup, Ph.D., Portland State University
- Ina Ganguli, Ph.D., University of Massachusetts-Amherst
- Jorge Garcia-Arias, Ph.D., University of Leon
- Heidi Garrett-Peltier, Ph.D., University of Massachusetts-Amherst
- Barbara Garson
- Armaan Gezici, Ph.D., Keene State College
- G. Reza Ghorashi, Ph.D., Stockton University
- Helen Lachs Ginsburg, Ph.D., Brooklyn College, City University of New York
- Jonathan P. Goldstein, Ph.D., Bowdoin College
- April Gordon, Winthrop University
- Ilene Grabel, Ph.D., University of Denver
- Jerry Gray, Ph.D., Willamette University
- Josh Greenstein, Ph.D., Hobart and William Smith Colleges
- Daphne Greenwood, Ph.D., University of Colorado-Colorado Springs
- Winston Griffith, Ph.D., Howard University
- Christopher Gunn, Ph.D, Hobart and William Smith Colleges
- Robert Guttman, Ph.D., Hofstra University
- Robin Hahnel, Ph.D., American University, Portland State University
- Eric Hake, Ph.D., Catawba College
- Martin Hart-Landsberg, Ph.D., Lewis and Clark College
- James Heintz, Ph.D., University of Massachusetts-Amherst
- Lisa Henderson, Ph.D., University of Massachusetts-Amherst
- John F. Henry, Ph.D., University of Missouri-Kansas City
- Arturo Hermann, Italian National Institute of Statistics
- Joan Hoffman, Ph.D., John Jay College of Criminal Justice
- Candace Howes, Ph.D., Connecticut College
- Michael Hudson, Ph.D., University of Missouri, Kansas City
- Dorene Isenberg, Ph.D., University of Redlands
- Russell Janis, Ph.D, J.D., University of Massachusetts-Amherst
- Tae-Hee Jo, Ph.D., State University of New York, Buffalo State
- Laurie Johnson, Ph.D., New York University
- Fadhel Kaboub, Ph.D., Denison University
- Rebecca E. Karl, Ph.D., History Department, New York University
- Mousa H. Kassis, Youngstown State University
- Farida C. Khan, Ph.D., University of Wisconsin-Parkside
- Mary C. King, Ph.D., Portland State University
- Tim Koechlin, Ph.D., Vassar College
- Harry Konstantinidis, Ph.D., University of Massachusetts Boston
- David Laibman, Ph.D., Brooklyn College and Graduate School, City University of New York
- Thomas Lambert, Ph.D., Northern Kentucky University
- Margaret Levenstein, Ph.D., University of Michigan
- Oren M. Levin-Waldman, Ph.D., Metropolitan College of New York
- Ariana R. Levinson, Ph.D., University of Louisville
- Victor D. Lippit, Ph.D., University of California, Riverside
- Paul Lockard, Ph.D., Black Hawk College
- Daniel MacDonald, Ph.D., California State University San Bernadino
- Allan MacNeill, Ph.D., Webster University
- Mark Maier, Ph.D., Glendale Community College
- Arthur MacEwan, Ph.D., University of Massachusetts Boston
- Ann Markusen, Ph.D., University of Minnesota
- J.W. Mason, Ph.D., John Jay College, City University of New York; Roosevelt Institute
- Patrick Mason, Ph.D., Florida State University
- Peter Hans Matthews, Ph.D., Middlebury College
- Peter B. Mayer, Ph.D., University of Louisville
- Scott McConnell, Ph.D., Eastern Oregon University
- Elaine McCrate, Ph.D., University of Vermont
- Terrence McDonough, Ph.D., National University of Ireland Galway
- Michael Meeropol, Ph.D., Western New England University
- Martin Melkonian, Hofstra University
- Dennis Merrill, Ph.D., University of Missouri-Kansas City
- Thomas Michl, Ph.D., Colgate University
- Marcelo Milan, Ph.D., Federal University of Rio Grade do Sul
- William Milberg, Ph.D., New School for Social Research
- John Miller, Ph.D., Wheaton College
- Paul Morse, University of Massachusetts Lowell
- Fred Moseley, Ph.D., Mount Holyoke College
- Philip I. Moss, Ph.D., University of Massachusetts Lowell
- Tracy Mott, Ph.D., University of Denver
- Michael J. Murray, Ph.D., Bemidji State University
- Ellen Mutari, Ph.D., Stockton University
- Léonce Ndikumana, Ph.D., University of Massachusetts-Amherst
- Don Negri, Ph.D., Willamette University
- Julie A. Nelson, Ph.D., University of Massachusetts-Boston
- Reynold F. Nesiba, Ph.D., Augustana College, Sioux Falls
- Eric Nilsson, Ph.D., California State University, San Bernadino
- Michael Nuwer, Ph.D., State University of New York, Potsdam
- Erik Olsen, Ph.D., University of Missouri Kansas City
- Spencer J. Pack, Ph.D., Connecticut College
- Aaron Pacitti, Ph.D., Siena College
- Zhaochang Peng, Ph.D., Rollins College
- Kenneth R. Peres, Ph.D., retired, Communications Workers of America
- Joseph Persky, Ph.D., University of Illinois at Chicago
- Karen Pfeifer, Ph.D., Smith College
- Xuan Pham, Ph.D., Rockhurst University
- Bruce Pietrykowski, Ph.D., University of Michigan-Dearborn
- Frances Fox Piven, Ph.D., Graduate Center, City University of New York
- Robert Pollin, Ph.D., University of Massachusetts-Amherst
- Mary Louise Pratt, Ph.D., New York University
- Paddy Quick, Ph.D., St. Francis College
- Devin T. Rafferty, Ph.D., St. Peter’s University
- Laura Reed, Ph.D., University of Massachusetts, Amherst
- Robert Reich, University of California Berkeley
- Felipe Rezende, Ph.D., Hobart and William Smith Colleges
- Carl Riskin, Ph.D., Queens College, City University of New York
- Judith Robinson, Ph.D., Castleton State College
- Sergio Romero, PhD, Department of Sociology, Boise State University
- Andrew Ross, Ph.D., New York University
- Robert J.S. Ross, Ph.D., Clark University
- Mario Seccareccia, Ph.D., University of Ottawa
- Malcolm Sawyer, Ph.D., University of Leeds
- Matías Scaglione, Ph.D., University of Wisconsin-Madison
- Helen Scharber, Ph.D., Hampshire College
- Ted P. Schmidt, Ph.D., State University of New York, Buffalo State
- Geoff Schneider, Ph.D., Bucknell University
- Juliet B. Schor, Ph.D., Boston College
- Elliot Sclar, Ph.D., Columbia University
- Carol Scotton, Ph.D., Knox College
- Stephanie Seguino, Ph.D., University of Vermont
- Alla Semenova, Ph.D., State University of New York - Potsdam
- Anwar Shaikh, Ph.D., New School for Social Research
- Zoe Sherman, Ph.D., Merrimack College
- Nathan Sivers-Boyce, Ph.D., Willamette University
- Bryan Snyder, Bentley University
- Peter Spiegler, Ph.D., University of Massachusetts-Amherst
- Janet Spitz, Ph.D., The College of Saint Rose
- Howard Stein, Ph.D., University of Michigan
- Mary Huff Stevenson, Ph.D., University of Massachusetts Boston
- Frank Thompson, Ph.D., University of Michigan
- Chris Tilly, Ph.D., University of California, Los Angeles
- Donald Tomaskovic-Devey, Ph.D., University of Massachusetts-Amherst
- E. Ahmet Tonak, Ph.D., Istanbul Bilgi University, Turkey
- Mayo C. Toruño, Ph.D., California State University, San Bernadino
- Eric Tymoigne, Ph.D., Lewis & Clark College
- Hendrik Van den Berg, Ph.D., University of Nebraska and Mount Holyoke College
- William Van Lear, Ph.D., Belmont Abbey College
- Irene van Staveren, Ph.D., Erasmus University Rotterdam
- Roberto Veneziani, Ph.D., Queen Mary University of London
- Eric Verhoogen, Ph.D., Columbia University
- Matías Vernengo, Ph.D., Bucknell University
- Stephen Viederman, Consultant
- William T. Waller, Ph.D., Hobart and William Smith Colleges
- John P. Watkins, Ph.D., Westminster College
- John Weeks, Ph.D., University of London
- Thomas Weisskopf, Ph.D., University of Michigan
- Cathy Whiting, Ph.D., Willamette University
- Jeannette Wicks-Lim, Ph.D., University of Massachusetts-Amherst
- John Willoughby, Ph.D., American University
- Tamar Diana Wilson, Ph.D., University of Missouri, St. Louis
- Jon D. Wisman, Ph.D., American University
- Judith Wittner, Ph.D., Loyola University
- Michael Wolff, Ph.D., University of Massachusetts-Amherst
- Martin Wolfson, Ph.D., University of Notre Dame
- L. Randy Wray, Ph.D., Bard College and University of Missouri-Kansas City
- Zhun Xu, Ph.D., Howard University
- Ben Young, Ph.D., University of Missouri at Kansas City
- June Zaccone, Ph.D., Hofstra University
- David Zalewski, Ph.D., Providence College
- Roland Zullo, Ph.D., University of Michigan
FINANCIAL SERVICES ACT OF 1999 -- (House of Representatives - July 01, 1999)
Mr. SANDERS. Madam Chairman, I rise in strong opposition to this bill. I support financial modernization if modernization means more choices for consumers, more competition, greater safety and soundness, stopping unfair bank fees and protecting consumers and underserved communities. But Madam Chairman, I believe this legislation in its current form will do more harm than good. It will lead to fewer banks and financial service providers, increased charges in fees for individual consumers and small businesses, diminish credit for rural America and taxpayer exposure to potential loses should a financial conglomerate fail. It will lead to more megamergers, a small number of corporations dominating the financial service industry and further concentration of economic power in this country.
It is no secret, Madam Chairman, that far bigger financial institutions lead to bigger fees which total more than $18 billion last year. The U.S. Public Interest Research Group and the Federal Reserve Bank have conducted studies and confirm that bigger banks charge larger fees, and there is no question in my mind that if this bill is passed, that process will be accelerated.
This bill is in fact, however, good for big banks, but the big banks are doing just fine without this bill. Government-insured banks earned a record $18 billion in just the first 3 months of this year, $2.1 billion more than they earned in the same period last year. At a time of increasing bank fees, increasing ATM surcharges, increasing credit card fees, increasing minimum balance requirements, it is time for the Congress to stand up for the consumers. The big banks are doing fine. Let us protect the consumers. Let us vote no on this legislation.
• [Begin Insert]
Madam Chairman, I rise in opposition to the bill.
I support financial modernization--if modernization means more choices for consumers; more competition; greater safety and soundness; stopping unfair bank fees; and protecting consumers and under-served communities.
But Madam Chairman, I believe this legislation, in its current form, will do more harm than good. It will lead to fewer banks and financial service providers; increased charges and fees for individual consumers and small businesses; diminished credit for rural America; and taxpayer exposure to potential losses should a financial conglomerate fail. It will lead to more mega-mergers; and small number of corporations dominating the financial service industry; and further concentration of economic power in our country.
The banking industry is currently involved in some of the largest mergers in history. Four of the top ten mergers last year involved bank deals totaling almost $200 billion. Today, three-quarters of all domestic bank assets are held by 100 large banks. And this bill, if passed in its current form, will further accelerate the consolidation of banking and financial assets that we have seen in recent years.
It is no secret, Madam Chairman, that bigger financial institutions lead to bigger fees--which totaled more than $18 billion last year. The U.S. Public Interest Research Group and the Federal Reserve Bank have conducted studies and confirmed that bigger banks charge higher fees than smaller banks and credit unions. The Public Interest Research Group's 1997 study of deposit account fees at over 400 banks found that big banks charge fees that are 15 percent higher than fees at small banks. Credit union fees, by comparison, were half those of big banks. And the Public Interest Research Group's 1998 ATM surcharging report found that more big banks surcharge non-customers, and big-bank surcharges are higher.
This bill is certainly good for the big banks of America, but the big banks are doing fine even without this bill. Government-insured banks earned a record $18 billion in just the first three months of this year--$2.1 billion more than they earned in the same period last year. Bank profits were also up $1.9 billion in the first three months of this year--beating the previous record set in 1998. And, according to the Federal Deposit Insurance Corporation, the increase in earnings was led by the largest banks, while smaller banks saw their earnings decline.
This bill has everything the big banks want, but it has little or nothing for consumers. It does not modernize the Community Reinvestment Act (CRA) by applying CRA requirements to new financial conglomerates. It does not stop ATM surcharges. It does not safeguard stronger consumer protection laws passed by the various States. It does not provide the strong privacy provisions that will be needed with the creation of large financial service conglomerates, It does not require that banks serve low- and moderate-income consumers by offering basic, lifeline accounts. And it does not even include provisions to protect women and minorities from discrimination in homeowner's insurance and mortgage services. These anti-discrimination provisions were included in the version of the bill that was reported out the Banking Committee, but they mysteriously disappeared from the bill when it came out of the Rules Committee.
At a time of increasing bank fees, ATM surcharges, credit card fees, increasing minimum balance requirements, discrimination against women and minorities, and the loss of many locally-owned banks to large, multi-billion dollar corporate institutions, Congress should consider pro-consumer legislation to directly address those problems. But this bill is not good for consumers, or small businesses, or taxpayers, or under-served communities. I urge my colleagues to reject this bill.