The rest of America, and the world, look to Silicon Valley for innovation and new high-quality job creation. The products and entrepreneurs from our region improve lives around the world, and inspire others to follow our example. We proudly consider ourselves leaders.
Our leadership is on display when it comes to economic justice. Last week, the Sunnyvale City Council voted to increase its minimum wage to $10.30 by Jan. 1, and index the wage to inflation so that it keeps up with rising costs of living. This was a critical step in addressing the insidious economic inequality experienced in Silicon Valley.
No one who works full time should live in poverty. As Marie Bernard, executive director of Sunnyvale Community Services, said at the council meeting where the wage was increased, “Minimum wage workers can’t afford to live here. Those who do are doubling and tripling up. They’re living in garages. And sadly, they’re living in cars.”
The national minimum wage, which stands at $7.25 an hour, is simply not enough to provide even a basic standard of living in 2014. In fact, today’s national minimum wage provides 25 percent less spending power than it did 45 years ago. This realization has led 23 states, and the District of Columbia, to raise their minimum wage above the federal level.
Raising the minimum wage is more than a moral issue–it is a fiscal issue. New studies have found that if we passed legislation to raise the federal minimum wage to $10.10 an hour, we would be able to reduce expenditures on poverty-fighting programs by $7.6 billion. Spending on food stamps alone would decrease by $4.6 billion per year.
While some special interest groups will claim that raising the wage will hurt small businesses, the facts show that it has a positive impact on business and the economy. San Jose has seen its unemployment rate drop 2 percent since its wage increase two years ago. While this cannot be completely attributed to the wage increase, it does counter the claim that such an increase will cripple small business. Surveys of employers show that 60 percent want a higher federal minimum wage, and 82 percent of business owners already pay above that amount.
As someone who fought to get the San Jose minimum raised in 2012, I promise that I will continue the battle in Washington until House Republicans agree to move toward guaranteeing everyone a living wage.
Raising the wage is an important first step, but it is only that: a first step. To truly address income inequality, we need to extend unemployment insurance for long-term job seekers, strengthen Social Security, modify our corporate tax structure to encourage more manufacturing and hiring in America, and expand the Earned Income Tax Credit.
Sunnyvale has done its citizens a great service by raising the minimum wage. I hope that, like many of the advances that have come from Silicon Valley, this is one that inspires the rest of the country to follow suit.
Congressman Mike Honda (D-CA) represents the 17th district of California, including Sunnyvale.
