After calling the sequestration situation a “manufactured budget crisis,” Iowa Senator Tom Harkin announced plans today for legislation he says will help to grow the nation’s economy and strengthen the middle class. Harkin, a Democrat, is co-sponsoring a bill to raise the minimum wage almost $3 from the current $7.25 an hour.
“I will join with Representative George Miller in introducing legislation to gradually increase the minimum wage to $10.10 an hour and to index the minimum wage to inflation so low-wage workers don’t fall behind as our economy grows,” Harkin says. “Our bill will also, for the first time in 20 years, raise the minimum wage for workers who earn tips.”
In his State of the Union address, President Obama proposed raising the minimum wage to nine-dollars an hour, but Harkin says that doesn’t go far enough to make sure working families can make ends meet. “Some 46,000 Iowans work for the minimum wage or less,” Harkin says.
“More than half of these are women. Nine in ten are adult workers, not teenagers. An additional hundreds of thousands of Iowans work for low wages below about $10 and that will benefit also from our bill.” The minimum wage reached a peak in 1968 and since then, Harkin says, the wage has lost 38-percent of its purchasing power while the prices for necessities like food and rent have risen dramatically.
“With an increase in the minimum wage, workers will have more money to spend and spend it locally,” Harkin says. “It’s basic economics, increased demand means increased economic activity. Economists estimate that our bill would grow the GDP, our Gross Domestic Product, by $33-billion and generate 140,000 new jobs as the bill is implement over a three-year time span.”
Harkin says if the minimum wage had kept place with inflation, it would now be at $10.56 an hour.