An Honest Day’s Work Deserves Fair Pay

July 19, 2007, On July 24, millions of Americans will get a pay raise when the federal minimum wage increases for the first time in ten years. In Tennessee, 151,000 workers will benefit directly from raising the federal minimum wage to $7.25 an hour over the next two years. This increase comes at a time when many families are living from paycheck to paycheck and struggling with record gas prices, skyrocketing health care costs and the mounting cost of college.

While the minimum wage has been stagnant for ten years, the cost of living has increased dramatically. Rising consumer costs have hit low-wage workers especially hard as the purchasing power of the minimum wage has plummeted to its lowest level in more than half a century.

At $5.15 an hour, a full-time minimum wage worker has brought home just $10,712 a year – barely above the federal poverty level for one person and nearly $6,000 below the poverty level for a family of three. In contrast, the average American CEO earns more before lunchtime in one day than a minimum wage worker earns all year.

Raising the minimum wage is about more than just economics; it’s about valuing families. This raise will help 3.3 million parents. About 6 million children will see their parents’ income rise. The minimum wage increase will give these families an additional $4,400 a year. That’s 15 months of groceries, more than two years of health care, 19 months of utilities or 20 months of child care.

Critics of a minimum-wage increase say the raise will hurt job growth, but the evidence says otherwise. A study released last year by the Center for American Progress showed that between 1997 and 2003, employment in small businesses actually grew more in states with a minimum wage that was higher than the federal minimum wage.

The minimum wage increase is Congress’ downpayment on broader efforts for families who work for a living. We are also working in a fiscally responsible way to make college more affordable, reduce energy costs and offer tax breaks for middle and low-income families.

An honest day’s work deserves fair pay, which is why this Congress is working to make sure American workers don’t live in poverty. We need an economic approach that will lift every American rather than just a privileged few. Hardworking families in Tennessee and across the nation deserve that, and they deserve this long-overdue pay raise.