America Deserves a Raise

by Secretary Tom Perez on January 30, 2014 · 1 comment

Editor’s note: This has been cross-posted from the Huffington Post.

It’s time to give America a raise.  That was one of the basic, core messages in President Obama’s State of the Union address Tuesday night.  He called on Congress to do what 21 states and the District of Columbia have already done – increase the minimum wage so that working people have enough in their paychecks to provide for their families.

Forward-looking companies get that this makes smart business sense.  That’s why the president and I visited a Costco store in Lanham, Md., the morning after his speech.  Costco pays their workers good wages with benefits, while selling good products at competitive prices and remaining quite profitable.

Secretary Perez speaks at a Costco in Lanham, Md., where workers are paid a good wage with benefits.

You see, as the President pointed out, Costco CEO Craig Jelinek isn’t doing this just for fun; he’s got his eye on the bottom line just like any good businessman.  But he understands that he can’t keep his business on top by running a race to the bottom.  That’s why I shop at Costco.  My wife and I have been members for more than 17 years – ever since we were buying diapers for our first-born who’s now on her way to college.

But they’re not the only company following this model.  I just got back from a visit to the 5th Street Ace Hardware store in Washington, where all employees make more than the federal minimum wage, most earning $10 per hour or more.

Editor’s note: Read Ace Hardware owner Gina Schaefer’s blog post on why she believes it’s important to raise the federal minimum wage.

Secretary of Labor Tom Perez stops by the 5th Street Ace Hardware in D.C., where employees are paid $10 per hour or more.

A few weeks ago, I met with a restaurant owner from Brooklyn who told me that he’s been able to retain his dishwashers for more than a year, thus reducing high training costs.  That’s a tall order for a position known for high turnover, but he did it by paying them $11 per hour.  It stands to reason: Higher wages means higher loyalty and morale, which means higher productivity, which means a more profitable business.

But we can’t wait for every employer to see the light.  So the president is using his authority to sign an executive order mandating that federal contractors pay their federally-funded employees at least $10.10 an hour.  Because, as he put it in the State of the Union: “If you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.”

But I would support one step that would render that Executive Order moot – to make a $10.10 minimum wage the law of the land for everyone.  The legislation has been introduced.  It’s just waiting for Congress to show the leadership, to take a common-sense step that, by the way, enjoys the support of more than three-quarters of Americans.

Increasing the minimum wage is part of the president’s vision of opportunity for all, a fair chance to get ahead if you’re willing to work hard.  It will help families and it will help businesses.  It’s the right thing to do and the smart thing to do.  So let’s give America a raise.

Follow Secretary Perez on Twitter @LaborSec and join the conversation around increasing the minimum wage  using #RaiseTheWage.

{ 1 comment… read it below or add one }

1 Mark Burgess February 21, 2014 at 10:32 am

I have several questions regarding the discussion on increasing the minimum wage, ones that I have not heard discussed during all of the talk and written debates over it. I am all for helping those who have a strong desire to succeed and support themselves and their families. However, I think an across the board increase has many conflicts. For discussions sake, we will just assume an desire to increase the minimum wage to $10.10 per hour. Here are my concerns:

If companies are required to increase all employees making less than the proposed minimum wage up to that wage, how are those that have been working hard for many years going to be positively impacted. For instances, I know individuals who started at a much less minimum wage, worked hard for years to get up to only $10 per hour. They would get only a $0.10 raise while people just starting out, having little to no experience, will make the same amount as them. How will this be addressed? How do you tell the employees that have been there for long periods of time that sorry, with this increase to all the staff making less than you, I can’t now afford to give you a raise for quite some time, but thanks for your effort, keep up the good work?

Companies and proponents for an increase in the minimum wage indicate their belief that individuals who have a higher wage tend to be harder workers, more dedicated workers, provide more stability in their workplace, and provide more longevity thus reducing turnover. However, that information is based on individuals making more per hour than the current minimum wage. How does this translate in a workplace where many employees with less experience, knowledge and tenure get a bump in pay up to those individuals that were excelling? Does the new minimum wage become the holding point for lack of productivity, dedication, stability and longevity?

Finally, has it ever been discussed that maybe a new way of thinking regarding the way to support individuals with public assistance could be tied into employment opportunities? Specifically, (and pardon me for not having actual numbers, but the actual number isn’t as important as the concept), if someone isn’t working and is making $500 per week on UI, $50 per week in WIC, $50 per week in food stamps (so any combination of assistance would provide $600per week. What if we incentivized employer to higher individuals off of the unemployment line by stating if they pay a “minimum” base wage (not the mandated minimum wage) of say $6/hour, the government will subsidize on top of that an additional $6/hour in place of a portion or all of their benefits, thus the individual that goes to work can make up to $480 per week in wages along with only a portion of the assistance (but the total of which would be in excess of their weekly assistance alone). The opportunity to make more than if they were only on assistance would incentivize the individual to go to work and opportunities could be created by employers because they wouldn’t be on the hook for as much of those salaries. This concept/model could only go on for as long as the individual would be eligible for UI (0r some other pre-determined length of time). It would give individuals work experience, let employers have a trial period with the individual, and hopefully at some point make them a permanent employee with full wages paid by the company.

Thank you for your thoughts. I look forward to hearing anyone’s response to each of these three concerns/ideas.

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