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Statement of the Hon. Dean Phillips on Perspectives from Main Street: Raising the Wage

It is an honor to chair this subcommittee, and to provide a platform for small businesses across America. Though our members may disagree on matters of policy, I want to make it clear that  [Looking to witnesses] We work for you, the small businesses present, and the small businesses owners across this country pursuing the American Dream.  I look forward to conducting this hearing and this year’s work in a bipartisan manner with ranking member Van Duyne.

Since the implementation of the New Deal in the 1930s, Congress has been tasked with determining – out of our collective perception of what is fair and what is right – a standard of living under which no working American citizen should fall.

An essential part of this floor is the minimum wage, which was intended to ensure that the least advantaged workers can provide for themselves, let alone their families. But over the past decades, this floor has significantly eroded in value, despite a modest increase to just $7.25 per hour in 2009. Meanwhile, Washington is caught in partisan gridlock and unable to provide the leadership so desperately needed to resolve the issue despite overwhelming public support for addressing it.

It is my core belief that all working Americans who live on the wages they earn, be paid one on which they can survive. It’s not just good for our humanity, it’s good for our economy - for consumption is the engine of our economy and money in peoples’ pockets is its fuel.

Unfortunately, the current minimum wage falls below the poverty line for a family of two or more. And I can’t imagine that anyone in this room - or anyone watching this hearing - would say it is fair and just for any American relying on full-time wages to survive to earn only $15,000 per year. It cannot make rent, it cannot pay for food, it cannot pay for health care, it cannot pay for childcare, and it surely cannot pay for education in any region of our country.

But - as I said during our mark-up two weeks ago, I am troubled that the Raise the Wage Act was included in the COVID relief package without more opportunities for small business voices to be heard and thoughtful members of Congress on both sides of the aisle to offer constructive feedback and amendments. And that is why we are here today. I am certain that all of us in this room have heard from small businesses and hard working people in our districts about the impact – both positive and negative – this policy change will have.

In my office, we heard from Ken, the owner of The Original Pancake House in Plymouth, Minnesota. Like so many businesses which rely on public gathering to succeed, his is barely hanging on. His restaurant - like all restaurants - runs on thin margins during the best of times, and Ken is deeply concerned that a $15 minimum wage will mean he will have to cut jobs if he hopes to stay open. I take these concerns seriously and they are guiding how we conduct this hearing today.

However, we cannot ignore the benefits our economy will reap from minimum wage. We often hear from small firms on how hard it is to attract and retain a skilled workforce and experts say this policy could help. Studies suggest that it can make workers more productive and boost morale. According to the CBO, the policy as written will likely raise wages for 27 million Americans, raise almost a million people out of poverty, and increase aggregate wages for low-wage workers by over $300 billion over the next decade. These newly empowered workers will in turn support local small businesses and our entire economy.

It is also essential that we discuss this through a racial and gender equality lens. Women and minorities would disproportionately benefit from a $15 minimum wage, which close pay gaps based on both race and gender. Unfortunately, the same CBO study also projects that this policy - as written - could cost 1.4 million jobs while intuition tells us it will also cost small business - both consequences which I find unacceptable - and preventable.

It is our duty on this Committee to listen to the voices of small businesses and support them, accordingly. While we may disagree on whether to increase the minimum wage or by how much or in what manner, I hope - and expect - that we will come together for a cordial, productive, and even provocative hearing that will serve the best interests of small businesses, their employees, and our communities.

Lastly and most importantly, I ask that we use our time today to identify ways in which we can mitigate the negative impacts of such a policy while maximizing the positive impacts of raising wages for millions of Americans. As I said two weeks ago and I’ll say again right now: livable wages, thriving businesses, and job growth are not mutually exclusive aspirations. So let’s work together to achieve that trifecta.


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