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$22 Minimum Wage Suggested by Democratic Sen. Elizabeth Warren

Image: $22 Minimum Wage Suggested by Democratic Sen. Elizabeth Warren

By Michael Mullins   |   Tuesday, 19 Mar 2013 08:58 AM

Tripling the minimum wage to $22 an hour from its current $7.25 an hour has been suggested by Democratic Sen. Elizabeth Warren, who until now had seemed to be keeping a low profile after defeating Republican Scott Brown in November for the Massachusetts seat.

In his State of the Union address on Feb. 13, President Barack Obama proposed increasing the federal minimum wage to $9 an hour.

"If we started in 1960, and we said [that] as productivity goes up, that is as workers are producing more — then the minimum wage was going to go up the same. And if that were the case, then the minimum wage today would be about $22 an hour," said Warren, the administration's former Special Advisor for the Consumer Financial Protection Bureau.

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Warren was speaking at last week's Education, Labor and Pensions Committee hearing on "Keeping up with a Changing Economy: Indexing the Minimum Wage."

Warren added: "So my question is . . . What happened to the other $14.75? It sure didn’t go to the worker."

Panelist Arindrajit Dube, an assistant professor at the Department of Economics at the University of Massachusetts-Amherst, responded to Warren's inquiry by drawing another comparison that appeared to suggest that the approximately $14 difference between today's actual minimum wage and Warren's hypothetical minimum wage was going to the nation's top 1 percent of earners.

"The answer to your question, 'who got the other $14?' we can answer with the following comparison. Had the minimum wage grown at the same pace [of] incomes going to the top 1 percent of the taxpayers, the minimum wage would have stood at $33 an hour before the recession in 2007."

Warren went on to suggest that such an increase in minimum wage would not lead to fewer jobs, as argued by many economists, but rather that raising the minimum wage by several dollars an hour was in fact doable.

"During my Senate campaign, I ate a No. 11 at McDonald’s many, many times a week and I know the price on that one, $7.19," she said. "According to the data on the analysis of what would happen if we raised the minimum wage to $10.10 over three years, the price increase on that item would be about four cents, so instead of being $7.19 it would be $7.23. Are you telling me that's unsustainable?"

Warren's $10.10 minimum-wage option has been floated recently by other Democrats, including House Minority Leader Nancy Pelosi who earlier this month proposed to her colleagues on the hill that the nation's minimum wage should be raised to $10.

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Opponents to a minimum wage increase argue that such a raise in hourly pay would have a negative effect on overall employment, preventing employers from hiring new entry-level workers and keeping the unemployment rate at or around 8 percent for years to come.

Related stories:

Employment Study: Minimum Wage Hike Means More Poverty

Proposed Minimum Wage Increase Would Still Leave US Workers Trailing Counterparts

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