News Release

Economy: Picking Fed Chair; Minimum Wage Same for Four Years


President Obama gives the first of a series of economic addresses today. The Hill reports: “[Press Secretary Jay Carney] indicated the speech would be thematically broad, selling the address as a sweeping discussion of the American economy rather than a specific policy prescription.”

The Washington Post reports: “Right now, Larry Summers is the front-runner for Fed chair.”

Today marks the fourth anniversary of the last increase in the federal minimum wage, on July 24, 2009.

DEAN BAKER, via Alan Barber, barber at
Baker is a noted economist co-director of the Center for Economic and Policy Research. He highlights the Federal Reserve choice facing Obama: “Picking Larry Summers for Fed chair would be exactly the wrong message to send at the moment. Summers is one of the main architects of the policies that have given us the worst downturn since the Great Depression. It would be an especially bad signal to send when there is an outstanding pick already at the Fed serving as Vice-Chair, Janet Yellen.” Baker wrote the pieces “The Return of Larry Summers?” and “Democracy Versus Bankers at the Fed.” Also, see by long-time Fed expert William Greider, “Stop Larry Summers Before He Messes Up Again.”

Baker blogs at “Beat the Press” and his books include: The End of Loser Liberalism: Making Markets Progressive [available for free online] and False Profits: Recovering from the Bubble Economy. Baker is widely know for having warned of the Internet and housing bubbles and the negative consequences they would bring.

A new poll released by the National Employment Law Project Action Fund finds that “80 percent of Americans – including 62 percent of Republicans and 80 percent of Independents – support raising the minimum wage to $10.10 per hour and indexing it to the cost of living, as proposed in the Fair Minimum Wage Act of 2013 introduced by Sen. Tom Harkin (D-IA) and Rep. George Miller (D-CA) earlier this year.”

The Fair Minimum Wage Act would raise the federal minimum wage over three years from its current $7.25 an hour to $10.10, then provide for annual increases linked to the rising cost of living. It would also gradually raise the minimum wage for tipped workers for the first time in more than 20 years from $2.13 an hour at present to 70 percent of the regular minimum wage.

AMANDA ROTHSCHILD, via Bob Keener, bob at
Co-owner and manager of Charmington’s café in Baltimore, Rothschild said, “I want my employees concentrating on our customers, not worrying how they will afford to pay rent or put food on their own table. We’ve paid our employees more than the minimum wage of $7.25 an hour from the day we opened in 2010, and have never regretted that decision. In fact, it’s helped our business succeed. We have low turnover, which saves us money, and our employees care about their work, which shows in the quality of service they provide and the quality of the food they turn out. If my small restaurant can pay higher entry wages, certainly the big chains can too.”

HOLLY SKLAR, also via Bob Keener, bob at
Director of Business for a Fair Minimum Wage and co-author of Raise The Floor: Wages and Policies That Work For All Of Us, Sklar said: “The current $7.25 federal minimum wage is lower than the $8.58 rate in 1956, adjusted for inflation. Today’s minimum wage workers have far less buying power than their counterparts did in 1968 when the minimum wage was at its highest value of $10.74 in 2013 dollars. We cannot build a strong economy with wages worth less than they were half a century ago. Minimum wage critics cloak their justification of poverty wages in the myth that increasing minimum wage increases unemployment. In fact, as we point out in ‘Research Shows Minimum Wage Increases Do Not Cause Job Loss,’ the most rigorous studies of the impact of actual minimum wage increases show they do not reduce employment.”

Rev. STEPHEN COPLEY, scopley at
Director of the Arkansas Interfaith Alliance and chairman of the national nonpartisan Let Justice Roll Living Wage Coalition, Copley said: “It is immoral that the minimum wage is worth less, adjusted for inflation, than the over $10 value it had in 1968, the year the Rev. Dr. Martin Luther King, Jr. was killed in Memphis while fighting for living wages. We cannot wait another year. People are suffering as they make the decision to buy groceries, purchase their medicines OR pay their utility bills. It is not right that in the richest nation in the world that people only make $7.25 an hour or $15,080 a year and have to make those kinds of choices. The clock is ticking toward the midnight hour, as Dr. King said. We cannot wait another year. Our Let Justice Roll motto is ‘A job should keep you out of poverty, not keep you in it.’ Now is the time to act.”