Bernie Sanders on the Minimum Wage

Bernie Sanders is at the forefront of the fight to make the minimum wage a living wage. Over the past 40 years, the cost of living has increased significantly while workers’ wages have stayed relatively flat, despite increased productivity. Meanwhile, the pay of CEOs is up nearly 1000 percent since 1978 — a figure that is double the stock market growth over the same period. In other words, almost all of the new wealth created in the last 25 years or so has gone straight to the top one percent, leaving most workers behind.

Current State of the Minimum Wage: People who work at least 40 hours a week working at the federal minimum wage should not be living in poverty.

Corporations Exploit the Minimum Wage: American taxpayers should not be picking up the tab on providing Medicaid and food stamps to fellow Americans because the wealthiest corporations are intentionally paying their employees so little.

Worker Productivity & Inflation: American workers are the most productive of any major country in the world, but while CEOs’ compensations soar, most workers’ wages are not keeping up with inflation.

Economic Growth Requires Raising the Minimum Wage: In order to rebuild the American middle class and boost the economy, the federal minimum wage should be a living wage.

Current State of the Minimum Wage

Bernie believes that American workers are way overdue for a raise in the minimum wage. When the Raise the Wage Act was introduced in the Senate in 2019, Bernie stated:

“Just a few short years ago, we were told that raising the minimum wage to $15 an hour was ‘radical.’ But a grassroots movement of millions of workers throughout this country refused to take ‘no’ for an answer. It is not a radical idea to say a job should lift you out of poverty, not keep you in it. The current $7.25 an hour federal minimum wage is a starvation wage. It must be increased to a living wage of $15 an hour.”  

Why do we need a higher minimum wage?

$7.25 is not enough money to pay the bills and support a family. Even when working full-time and year-round, one in nine U.S. workers are living in poverty. The effects of low wages can be viewed as a ripple effect throughout the economic and social spheres. As wages decrease, there is a consequential decrease in real purchasing power and workers are inclined to take on more work in order to subsist. Nearly 40 percent of hourly-paid workers are now working more than 40 hours a week.

A family living paycheck to paycheck will struggle to meet the needs of the family. This can include difficulties such as putting away savings toward higher education, eating a healthy diet, having the leisure time and money to accompany a child during play or take them to extracurricular activities, and being unable to clothe or house them adequately — all important factors in the future outcomes of children.

These negative consequences on child outcomes create a cyclical effect, and children born in poverty are more likely to continue to be poor. In short, the effects of a non-living wage are not only felt by individuals who receive it, but by all sectors of society, including children.

On top of all of this, because the minimum wage is currently so low, many workers earning the minimum wage receive public assistance from the federal government in order to support themselves and their families. Therefore, according to the Economic Policy Institute, raising the minimum wage by just a few dollars would cause 1.7 million Americans to no longer rely on public assistance and “reduce government expenditures on current income-support programs by $7.6 billion per year”.

But if people making minimum wage are frugal enough, won’t they be fine?

No. Currently, affordable housing is out of reach for many American families. The U.S. Department of Housing and Development (HUD) recommends that a family pay no more than 30 percent of their income for housing so it can afford other necessities such as food, clothing, transportation, and medical care. HUD found that 12 million households pay more than 50 percent of their annual incomes for housing and that a full-time worker earning the minimum wage “cannot afford the local fair-market rent for a two-bedroom apartment anywhere in the United States.”  The National Low Income Housing Coalition found there is no state in the union where a minimum wage worker can spend under 30 percent of their income for a one bedroom apartment based on market prices.

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And not only can they not pay rent, people earning the current federal minimum wage sometimes can’t pay for food. According to the National Center for Childhood Poverty, some 21 percent of American children live below the poverty level of $20,780 a year for a family of three and 43 percent of children live in low-income families.

What is Bernie’s legislative record on the minimum wage?

Bernie has been pushing for a higher minimum wage for most of his political career. In 1993, he introduced one of his first pieces of legislation, the Liveable Wage Act of 1993. He then re-introduced the bill in 1995, 1997, and 1999.

In 2001, he introduced the Minimum Wage Restoration Act and went on to co-sponsor several other similar bills over the next decade. In 2013, he proposed and argued for a budget amendment to raise the minimum wage to $10.10 per hour.

In July 2015, Bernie proposed a new amendment that would make the federal minimum wage $15 per hour. Bernie’s latest legislation was preceded by a letter from 200 professional economists recommending raising the federal minimum wage to that same $15 per hour level. The economists estimate that 76 million Americans stand to benefit from raising the minimum wage.

Here’s Bernie introducing his legislation:

 

In 2019, the Raise the Wage Act was introduced with 30 co-sponsors in the Senate. The bill would:

  • raise the minimum wage to $15 by 2024,
  • index future minimum wage increases to median wage growth, and
  • end lower than minimum wages for tipped workers, youth workers, and workers with disabilities.

What has Bernie said about the current state of the minimum wage?

Best to let him do the talking. Watch Bernie passionately discuss the minimum wage during a 2013 Senate hearing:

Corporations Exploit the Minimum Wage

When businesses fail to pay their workers a living wage, workers increasingly depend on social services paid for by middle-class taxpayers. Bernie has called this “Welfare for Walmart.”

What does “Welfare for Walmart” mean?

There is record inequality where the top 1% controls 38.6% of America’s wealth.

Bernie said, “At a time of massive income and wealth inequality, when the 3 wealthiest people in America own more wealth than the bottom 50 percent and when 52 percent of all new income goes to the top one percent, the American people are tired of subsidizing multi-billionaires who own some of the largest and most profitable corporations in America,”

In a cynical defense of corporate welfare, commentators for a corporate lobbyist group suggest it would be cheaper to just pay the tax penalty than to pay workers a living wage.

In this video, Bernie talks about corporate welfare where companies like Amazon and Walmart burden the public assistance system by underpaying their employees.

OK, but what does it have to do with Walmart specifically?

The Walton family, Walmart’s largest shareholders, is the wealthiest family in America, estimated to be worth $175 billion.

That’s more than 49 million American families’ net worths combined.

Walmart is one of the largest, most profitable corporations in the United States, yet it does not pay their workers a living wage and keeps workers as part-time employees to avoid providing healthcare benefits. Many Walmart workers rely on Medicaid for health insurance and food stamps to feed their families which are paid for by taxpayers, at a cost of at least $6.2 billion each year. Bernie has called this “Welfare for Walmart.”

In this video of a 2014 hearing, Bernie asks some pertinent questions about Walmart and the minimum wage:

 

In 2019, Bernie was invited to speak on behalf of Walmart workers at a shareholder meeting. He demanded that the owners of Walmart pay their workers a living wage and give hourly workers seats on the board. The resolution was overwhelmingly defeated in a shareholder vote later that afternoon.

Watch the meeting in its entirety:

What other companies has Bernie criticized?

Bernie has been a vocal critic of many large corporations paying low wages, but he has very publicly criticized Amazon and Disney.

In 2019, Bernie introduced the ‘Stop Bad Employers 5 by Zeroing Out Subsidies (Stop BEZOS) Act, which would tax large companies equal to the amount their employees rely on Section 8 housing, SNAP, and other welfare programs. For example, Amazon would pay a corporate welfare tax of $100 for a warehouse worker that is paid so poorly by the company that she must rely on $100 in food stamps to feed her family. He co-sponsored a similar bill in the House in 2005.

Shortly after Bernie introduced the Stop BEZOS Act, Amazon announced it was raising its minimum wage to $15 an hour.

In July 2018, Bernie called out Disney CEO Bob Iger for accepting a $400 million pay package while Disney workers struggled to provide for their families.

One month later, bowing to public pressure and the year-long union negotiation, Disney agreed to raise the minimum wage for its union workers to $15 an hour.

Bernie didn’t stop there. He kept up his public pressure of Disney and proposed that the company use the profits from the blockbuster Avengers film to pay its workers more.

So what does this have to with the minimum wage?

Everything. Because the minimum wage is so low — a “starvation wage” according to Bernie — companies like Walmart can exploit both workers and American taxpayers, by forcing its employees to heavily depend on public assistance programs to survive.

Watch Bernie question a representative from the Manhattan Institute of Policy Research, a conservative American think-tank, on Walmart and the minimum wage in this 2014 hearing:

 

What labor actions has Bernie supported in the fight for a living wage?

In February, Bernie stood with the United Electrical Union workers at Wabtec Locomotive plant, in Erie, Pennsylvania. “Americans are sick and tired of corporate America and their wealthy CEOs ripping off working families,” he said.

“I’m proud to stand with the locomotive manufacturing workers of @ueunion Local 506 and 618 in their fight against GE/Wabtec to maintain decent wages and working conditions.”

In April, Bernie joined the UCLA picket line in California and spoke in support of the AAUP-AFT Rutgers professors in New Jersey, as well as the NY Nurses Association. Bernie stood with UFAW stop and shop workers throughout the northeast during their 11-day strike. Bernie also stood with 1,600 striking grad students during their 3-week strike. In May, Bernie backed the Uber and Lyft drivers striking across 10 major U.S. cities. Bernie spoke in Lordstown, Ohio, where the General Motors automobile plant closed, resulting in the loss of 1,400 manufacturing jobs.

Are other workers being underpaid?

Yes! Bernie also believes that teachers are not paid enough for the important work they do. He supports teachers as they fight for decent wages.

There is an enormous gap between teachers salaries in different states. Low pay, large classes and funding cuts have lead to many recent teacher strikes including in West Virginia, California, Colorado, Virginia, Arizona, Oklahoma, Kentucky, North Carolina, and South Carolina. Oklahoma teacher salaries went up substantially after a nine-day strike in the spring of 2018.

Worker Productivity & Inflation

Bernie is one of the very few congressional leaders to talk about how American workers are more productive and work longer hours than they ever have before, and more than workers in any other industrialized nation. In a June 2015 op-ed, Bernie wrote:

“Here is the reality of the American economy. Despite an explosion in technology and a huge increase in worker productivity, the middle class continues its 40-year decline. Today, millions of Americans are working longer hours for lower wages and median family income is almost $5,000 less than it was in 1999.”

Wages are no longer keeping up with inflation:

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Great — what are actual economists saying about this, though?

According to the Economic Policy Institute, American workers are the most productive in the world, but their wages have not kept up with inflation since 1968.

Per a petition by over 200 economists:

“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.”

But there’s so much money being made in America. Where is it all going?

It’s going to the top! The average inflation-adjusted CEO compensation is up 997 percent since 1978. Today, the ratio of CEO to average worker compensation is at least 235 percent higher than when it started to skyrocket in 1991 to obscene amounts and continued to rise throughout the decade.

Furthermore, the study shows that CEO annual compensation was the only type of compensation that showed any sort of consistency in keeping up with inflation. CEOs now make 296 times what a typical worker earns.

If I work longer hours, will I make more money?

Unfortunately, that doesn’t appear to be the case.  Also, working overtime reduces your productivity, and makes you feel and actually be less healthy. It also makes you more likely to develop a whole range of diseases including depression.

Economic Growth

Bernie has proposed an amendment to make the minimum wage a living wage by increasing the federal minimum wage in increments to $15 per hour by 2020.

How does today’s minimum wage of $7.25 per hour compare to levels set in the past?

Placed in a historical context, the current federal minimum wage represents a serious decrease of purchasing power with respect to increases in cost of living over the past 40 years. Had minimum wage risen with the inflation and productivity increases since 1968, the minimum wage today would be closer to $18 per hour.

Will increasing the minimum wage lead to fewer jobs?

There is an increasing amount of evidence that shows that workers’ pay hikes ultimately lead to stronger job growth. Additionally, this would not be the first time the country has increased the minimum wage or even doubled it, as Bernie has proposed. In 1949, President Truman led precisely the same charge and the country saw unemployment decrease over the next several years to a 10-year low by 1953.

Moreover, Bernie’s home state of Vermont, along with other states that recently raised the minimum wage, seem to be doing just fine. In 2014, the states that raised their minimum wages experienced more job growth than states that didn’t.

Job loss is mitigated on two fronts when raising the minimum wage:

  1. If you put money in the hands of low-income people, they spend it.
  2. Increased wages means some minimum-wage earners who are working two to three jobs to make ends meet can reduce hours, thereby opening up employment opportunities for those that have no job.

Won’t increasing the minimum wage harm small businesses?

Many conservatives claim that this is the case, but the evidence does not support it. Seattle, one of the cities to more recently raise the minimum wage to $16, has seen large increases in employment and income. According to MyNorthwest.com, not only have many of the businesses who opposed the increase seen higher employment numbers, some are even opening additional locations. In 2014, a study by the Center for Economic and Policy Research found that the 13 states that increased the minimum wage saw employment numbers increase faster than states that did not, an average of 0.85 percent compared to 0.61 percent in the other 37 states.

Several studies over the last 15 years have shown that increasing the minimum wage lowers employee turnover. CostCo saw just 17 percent overall turnover (compared to the industry average, which was around 44 percent), and only six percent after one year, as well as a massive decrease in employee theft in 2005. In 2003, the San Francisco Airport raised the minimum wage of employees to $10/hr and saw an 80 percent decrease in turnover among airport security screeners, a 44 percent drop among cabin cleaners, and 25 percent drop among ramp workers. The reduction in turnover saved companies $6.6 million. In 2004, San Francisco saw an average increase in length of employment of 3.5 months, and saw six percent of workers move from part-time to full-time.

And many small business owners support an increase.

What else is Bernie doing to promote more economic opportunities for working Americans?

In addition to increasing the minimum wage, Bernie has proposed legislation which would increase employment opportunities, education, and training for young workers, and provide decent-paying jobs to all Americans that want them. Learn more about his other policies for working people.