History shows us that increasing the minimum wage will not cost jobs, the author writes. Raise the minimum wage

Seventy-five years ago, during the height of America’s gravest economic crisis to date — the Great Depression — President Franklin D. Roosevelt enacted the landmark Fair Labor Standards Act, which established the first federal minimum wage.

Roosevelt and minimum wage proponents of the time looked to a fair minimum wage as a way to end exploitative labor practices and to encourage consumer spending. A minimum wage would help workers afford the basic necessities of life and reduce dependence on charity and public assistance. It would also ensure that good businesses would not have to compete on the same playing field as exploitative sweatshops. To FDR and other allies, a minimum wage was an economic and a moral imperative.


Make no mistake: The FLSA faced vigorous opposition. Those fighting the new law — which required a minimum wage of 25 cents per hour — claimed that it would not work and that it would harm the people it was meant to help. Minimum wage opponents said that it would harm the economy and that it was antithetical to freedom and liberty; one adversary likened it to the fall of Rome. We know these predicted economic catastrophes did not come to pass. But that hasn’t stopped minimum wage opponents from using the same tired arguments today, 75 years after the FLSA was signed into law.

Just as in the time of FDR, the case for a higher minimum wage today couldn’t be more compelling. Today’s federal minimum wage, which has not budged since 2009, is just $7.25 an hour. It is not a fair minimum wage but a poverty wage. It has nearly one-third less buying power than it did at its peak in 1968, and a single parent with two children — who works a full-time minimum wage job — falls $3,000 below the poverty line. It is simply wrong that in a nation as rich as ours, people who go to work every day are unable to put food on the table, pay the electricity bill or keep up with the rent.

That’s why Rep. George Miller (D-Calif.) and I introduced the Fair Minimum Wage Act earlier this year. Our bill would raise the minimum wage to $10.10 per hour — in three steps — then index the minimum wage to inflation. Our bill would also gradually raise the tipped minimum wage, which has stood at just $2.13 since 1991. It is a modest and reasonable proposal that would help give more than 30 million American workers — including the parents of 18 million children — a raise. But despite the compelling case for a raise, opponents are still claiming that our bill would cause economic catastrophe, with the same vehemence that they opposed a 25-cent minimum wage 75 years ago.

Yet history shows us — and new economic research confirms — that nothing could be further from the truth. Increasing the minimum wage will not cost us jobs; in fact, according to an analysis conducted by the Economic Policy Institute, raising the minimum wage to $10.10 per hour will increase the gross domestic product by nearly $33 billion over the course of three years as workers spend their raises in their local businesses and communities. This economic activity will generate 140,000 new jobs over the same time period. It’s clear that in 2013 — just as in 1938 — raising the minimum wage is good for workers, good for businesses and good for our economy.

On Tuesday, I will chair a hearing of the Senate HELP Committee to mark the great contributions that the minimum wage has made to our economy and to America’s workers and their families. But as we celebrate 75 years of the minimum wage, we must also recognize that it is no longer achieving its potential impact in our economy or for America’s working families. Every American deserves the chance to build a better life for his or her family — and raising the minimum wage will provide that opportunity.

Sen. Tom Harkin (D-Iowa) is chairman of the Health, Education, Labor, and Pensions Committee.