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Economy: Pay Raise for America

It's the first time in a decade that the federal minimum wage has risen, jumping 70 cents to $5.85 an hour.

JULY 24, 2007 by Faiz Shakir, Nico Pitney, Amanda Terkel, Satyam Khanna, and Matt Corley
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ECONOMY

Pay Raise for America

Today is a good day for 13 million Americans. It’s the first time in a decade that the federal minimum wage has risen, jumping 70 cents to $5.85 an hour. The minimum wage will continue to increase each summer until 2009, when “all minimum-wage jobs will pay no less than $7.25 an hour.” This raise is long overdue. The conservative 109th Congress, aided by President Bush, repeatedly blocked any increase in the minimum wage. Under the previous minimum wage, a full-time worker making $5.15 an hour earned $10,712 a year; the federal poverty line is $17,170. “It has been a long time,” said Sen. Ted Kennedy (D-MA). “We have heard those that say, well, with the increase in the minimum wages, this will cost jobs. It will bring hardship upon these people. That’s what they have said on every increase. This is the 11th increase in the minimum wage and they have been wrong every other time.”

MORE MONEY FOR NECESSITIES: Of the 13 million Americans who will benefit from this minimum wage increase, more than 60 percent are women and almost 40 percent are people of color. As Kennedy notes, workers making the minimum wage will “almost immediately earn an additional $1,500 to help support their families. When the full increase takes effect in 2009, these workers will see a total increase of $4,400 per year.” This amount could pay for more than two years of health care, 15 months of groceries, or 30 months of college tuition at a public, two-year college. According to an analysis by the Center for American Progress, “Before today, minimum-wage earners working to buy hamburger dinners their families would’ve had to work nearly four more hours per week today than they did in 1997 to buy the same meal. After the increase, they’ll be able to work an hour and a half less to feed their families.”

RISING POVERTY DURING BUSH ADMINISTRATION: Under Bush, the number of Americans in poverty has increased by 5.4 million. Approximately “37 million Americans currently live in poverty, including 13 million children. Among full-time, year-round workers, poverty has increased by 50 percent since the late 1970s.” In 2005, the richest one percent of Americans had the largest share of the nation’s income — 19 percent — since 1929, while the poorest 20 percent of Americans had only 3.4 percent of the nation’s income. At $5.15 an hour, the minimum wage was at its lowest level in real terms since 1956. But even with this raise, more than two dozen states and the District of Columbia already have minimum wages higher than the federal level. According to the Congressional Research Service, “If the minimum wage were linked to the real purchasing power of a dollar, it would already have reached $9.05 in January 2006.” Many of the 2008 presidential candidates have made raising the minimum wage even further a focus of their campaigns, with Sen. John Edwards (D-NC) promising in last night’s Democratic debate to raise the level to $9.50 an hour by 2012. Former senator Mike Gravel promised a living wage, and Sen. Chris Dodd (D-CT) called for a a raise of “at least $9 or $10.”

RIGHT-WING OBSTRUCTION: According to a Dec. 2006 poll, 80 percent of the American public supports an increase in the minimum wage. Yet even in the new Congress, the right wing has tried to obstruct any wage increase. Conservatives in the 110th Congress attempted to obstruct progress on raising the minimum wage, forcing the legislation to garner a supermajority of 60 votes to end debate and vote on the bill itself. “This bill is unfair to workers and, in many cases, it will be harmful to the very people it is supposedly designed to help,” said Sen. Tom Coburn (R-OK) in February. “Most workers will experience a minimum-wage penalty rather than a minimum-wage benefit because of this bill.” Conservatives, such as Coburn, argued that a raise in the minimum wage would hurt small businesses. But an American Progress study found that employment in small businesses, the number of small businesses, and inflation-adjusted small business payroll growth grew more in states with higher minimum wages than federal minimum wage states. A recent Gallup poll found that “three out of four small businesses said that an increase in the minimum wage would have no effect on their company.” Rep. Roy Blunt (R-MO) tried to insist that Members of Congress should also get a raise too, even though they already have an annual salary of $165,200.

UNDER THE RADAR

ETHICS — WHITE HOUSE BRIEFED TOP DIPLOMATS ON GOP ELECTORAL GOALS AND STRATEGY: The Washington Post reports today that “White House aides have conducted at least half a dozen political briefings for the Bush administration’s top diplomats, including a PowerPoint presentation for ambassadors with senior adviser Karl Rove that named Democratic incumbents targeted for defeat in 2008 and a ‘general political briefing’ at the Peace Corps headquarters after the 2002 midterm elections.” Though it has previously been revealed that the White House briefed domestic political appointees on electoral prospects, documents obtained by the Senate Foreign Relations Committee “show for the first time how the White House sought to ensure that even its appointees involved in foreign policy were kept attuned to the administration’s election goals.” “In one instance, State Department aides attended a White House meeting at which political officials examined the 55 most critical House races for 2002 and the media markets most critical to battleground states for President Bush’s reelection fight in 2004.” A White House Office of Special Counsel investigation recently found that General Services Administration chief Lurita Doan violated the Hatch Act, which bars federal officials from partisan political activity while on the job, after she asked how she could “help our candidates” following a political PowerPoint presentation by Scott Jennings, the then-White House deputy director of political affairs. According to his aides, Sen. Joe Biden (D-DE), the Chairman of the Foreign Relations Committee, “plans to raise the matter at a confirmation hearing today for Henrietta Holsman Fore to be administrator of the U.S. Agency for International Development, whose political appointees received at least two White House briefings in the past 10 months, as well as at an oversight hearing tomorrow on the Peace Corps.”

ADMINISTRATION — BUSH UNDERCUTTING SCIENTISTS BY REFUSING TO ADEQUATELY FUND NIH: Over the last four years, the National Institutes of Health (NIH) has not gotten even a penny increase” under President Bush’s budgets when adjusted for inflation, and now the administration’s fiscal year 2008 budget threatens to “cut NIH funding by $250 million.” These funding decisions “are set to damage a whole generation of young research workers.” As Center for American Progress senior fellow and former national economic adviser Gene Sperling notes, NIH funding freezes lead to “fewer hires, lower salaries and increased layoffs among those who represent America’s scientific future — the 60,000 ‘postdocs’ who seek lifelong careers in research.” In addition, strains on the NIH budget lead to diminished support of research in fields with a proven record of success, such as Alzheimer’s disease and asthma. This also makes “supporting new ideas and helping faculty members start their careers” — critical functions of NIH — much more difficult. Moreover, “implicitly discouraging homegrown scientists could not be more illogical for our economic future,” as Sperling points out, since “raising NIH funding for university research could help foster the types of technology clusters that encourage companies to keep [research and development] plants on U.S. shores.” In fact, as the  Harvard Business Review notes, NIH grants foster entrepreneurship by stimulating the “kind of research [that] translates basic scientific findings and concepts into specific product opportunities.” Clearly, “[s]hortchanging the NIH to compensate for the fiscal impact of tax cuts and rising defense and prescription-drug spending is penny-wise and pound-foolish.”

IRAQ — U.S. EMBASSY DEEMED INADEQUATE FOR WAR ZONE:  As the new American embassy in Iraq nears completion, U.S. policy planners fear that the project may not be big enough or safe enough to sustain its staff if a “major military pullout leaves the country engulfed in a heightened civil war.” Designed three years ago “on rosy assumptions that stability was around the corner,” the $592 million dollar project has been plagued by insecurity, controversy, delays, and shoddy workmanship. Architectural plans for the embassy were posted on the Internet in May, and the compound has been targeted by more than 85 rocket and mortar strikes, resulting in the deaths of at least 16 people. The lead builder “has been beset by accusations of deceptive and abusive labor practices on the project” and “the embassy has also complained about shoddy workmanship at a facility to house security guards.” Rising sectarian violence had also delayed the project by three months and construction has piqued Iraqi resentment and stocked fears of a sustained U.S. presence in Iraq. “It’s all for them, all of Iraq’s resources, water, electricity, security. … It’s as if it’s their country, and we are guests staying here,” said Raid Kadhim Kareem, a security guard who has monitored the project. 

THINK FAST

Attorney General Alberto Gonzales will appear before the Senate Judiciary Committee today. “Armed with the president’s support, Gonzales has made clear that he does not intend to leave office before Bush does.” “This attorney general has a severe credibility problem,” said Chairman Patrick Leahy (D-VT), adding that there is an “acute crisis of leadership that has gripped the department under his watch.”

Members of the Bancroft family, which “controls financial publisher Dow Jones & Co. is expected to decide within days whether it will relinquish its stake and let Rupert Murdoch’s News Corp. get the company for $5 billion.” They assembled “for six hours Monday in Boston to hash out whether to accept Murdoch’s offer.”

“While Washington is mired in political debate over the future of Iraq,” Gen. David Petraeus and Ambassador to Iraq Ryan Crocker have “prepared a detailed plan that foresees a significant American role” through 2009.

“Under a bill the House approved Monday, members of Congress would no longer be able to put their spouses on their campaign payrolls, a practice criticized as a way for lawmakers to profit from political donations.” The act would also require the disclosure of all other immediate family members who are employed by the candidate’s campaign.

“The campaign of the late congressman Charlie Norwood (R-GA) treated his supporters to a $63,000 thank-you weekend at a golf resort two months after he died — the same day that the candidate endorsed by Norwood’s family held a fundraiser at the same resort, reports and interviews show.”

The worst flooding to hit England in at least 60 years has put tens of thousands of people to flight, many leaving their homes, cars and possessions to the ravages of rising water and looters. Forecasters warned yesterday that more rain is on the way.”

And finally: Ben Affleck stars in “corny” environmental ad. In a new ad for the Clean My Ride campaign, actor Ben Affleck “sports a pointy, yellow foam corn hat with leafy green ears and offers to take down Big Oil. ‘Congress bows to fear,’ Affleck hisses at the hero, who seeks to sweeten lawmakers on corn-based ethanol. ‘I bring the fear. Does big oil sleep around? Got bad credit? I’ll find the dirt. And I will make big oil regret the day it ever uttered the words price gouging!'”

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GOOD NEWS

In Washington state, “scores of gay and lesbian couples lined up to register as domestic partners as a new state law took effect.”

STATE WATCH

CONNECTICUT: “This city is becoming the first in the nation to offer identification cards to illegal immigrants, trying to bring them out of the shadows even as many municipalities crack down on them.”

ALABAMA: On-the-ground reporting from abortion clinics in Birmingham.

MISSOURI
: Right wing blocking progress on stem cell research.

HOMELAND SECURITY: According to new survey, nearly “one-third of residents in U.S. coastal areas vulnerable to hurricanes say they won’t obey orders to evacuate if a major storm threatens.”

BLOG WATCH

THINK PROGRESS: Newt Gingrich’s advice to President Bush on Iraq: “Simply be quiet, say nothing.”

THINK PROGRESS: The New York Times’s David Brooks admits he picked facts “out of the air” to defend President Bush’s Iraq policy.

DAILY DISH: A progressive blogger “tests the ideological waters” and requests an interview with Gen. David Petraeus, who recently appeared on right-winger Hugh Hewitt’s radio show.

THE PLANK: Right-wing pundit Robert Novak dishonestly attacks Senate Majority Leader Harry Reid in his Washington Post column.

DAILY GRILL

“Our enemies aren’t threatened by talk-a-thons, and our troops deserve better than publicity stunts.”
— Sen. Mitch McConnell (R-KY), 7/17/07, commenting on the Senate’s recent all-night session on Iraq

VERSUS

“They will use every excuse, every slogan, every political trick to not let us end this war, so I would call that the stunt, and that’s the stunt that’s killing Americans.”
— Sen. Russ Feingold (D-WI), 7/23/07