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Minimum Wage Employees Have Tough Time; Should Minimum Wage Be Increased?

Aired December 9, 2013 - 23:00   ET


DON LEMON, CNN ANCHOR: It is 11 p.m. in the East. Do you know where your news is? Good evening, everyone. I'm Don Lemon. This is "THE 11TH HOUR," the last word on today and what you'll be talking about tomorrow.

Tonight, let me ask you a very simple question. Could you live on the minimum wage? I mean, feed your family, pay rent and buy everything else you need on $7.25 an hour? You probably couldn't. I know I couldn't, and a lot of people think $7.25 an hour is just not enough, President Obama included.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We know that there are airport workers and fast food workers and nurse assistants and retail sales people who work their tails off. And are still living at or barely above poverty. And that's why it's well past the time to raise a minimum wage that in real terms right now is below where it was when Harry Truman was in office.


LEMON: So you heard from the president there. I want to show you, fast-food workers across the country walked out last week demanding better pay. But what is a fair wage in 2013? Can America even afford it?

CNN's Poppy Harlow is here.

Poppy, you met a single mom, and despite working full time on the night shift, she just can't make it.

POPPY HARLOW, CNN CORRESPONDENT: She can't make it. Her name is Joanna Cruz, and she is one of so many that says, look, we're not making what they are calling a living wage. We have seen this play out on the streets of America. Many people calling for $15 an hour, more than double the federal minimum wage.

But the question is, can retailers afford that or should the government step in and mandate, mandate that. Consider this, this fight is happening, Don, on Main Street while wall street is watching the stock market hit record highs and almost half of all Americans have no investment whatsoever in the stock market. So, increasingly, this is a tale of two America.


JOANNA CRUZ, MAKES MINIMUM WAGE: You have no money on your lunch account?


HARLOW (voice-over): At 29 years old, Joanna Cruz is stuck. Stuck in a job that pays $7.30 an hour. She works overnights at a deli, 40 hours a week. Her weekly paycheck, $244.70.

(on camera): What do you need to make to be able to get by on your own?

CRUZ: I would have to make at least $14, $15 to be able to live, comfortably.

HARLOW: Do you add it up as you go?

CRUZ: Yes.

HARLOW: You do.

CRUZ: I have to.

HARLOW (voice-over): She is a single mom fighting to get by. Don't be mistaken, she blames herself for not finishing high school and not going to college. But she tells me there has to be more she can achieve.

CRUZ: There is no moving up. I mean, I might get a raise if I'm there long enough. But that's about it.

HARLOW: Joanna's life mirrors her mother's. Augusta Cruz worked 30 years in a mattress factory and said she never made more than $9 an hour.

AUGUSTA CRUZ, MOTHER OF JOANNA CRUZ: It's a vicious cycle for everybody.

HARLOW: Her mother provides the home that Joanna can't afford.

(on camera): If it wasn't for you having them here under your roof, where would Joanna be?

AUGUSTA CRUZ: In the shelter, in the street.

HARLOW (voice-over): Years of low-wage work has left Joanna with little hope.

CRUZ: I'm already employed now. By the time I finish school, I'll probably be like 40, and then who is going to hire a 40-year-old just starting off with no experience. It's probably, not going to happen. Some days I don't want to try.

HARLOW (on camera): Tell me what you mean?

CRUZ: I feel like, what's the point? What's the point of trying? I'm not going to make it anyway.

HARLOW: Do you think from the outside looking in people have any idea what you go through?

CRUZ: No. None.

HARLOW: Americans have long believed in a fair day's pay for a fair day's work. But we can't agree with what that wage is today.

President Obama supports raising the federal minimum wage from $7.25 to about $10 an hour. But critics argue that won't help. It will hurt, costing jobs and increasing prices.

DAVID NEUMARK, CENTER FOR ECONOMICS & PUBLIC POLICY, U.C. IRVINE: The general prices go up and people buy a little less and, therefore, firms use less labor. You are better off if you earn a higher wage, clearly. But weigh that against the likelihood that the employer will make do with somewhat fewer workers, and you might be one of those workers.

HARLOW: At the center of the debate, fast-food chains and big-box retailers. In 2012, the average pay for a fast-food worker was $9. For a retailer worker, it was $12.17. Both higher than minimum wage.

Still, Tiffany Beroid, a part-time Walmart, worker is among those demanding higher pay.


HARLOW: She is a member of Our Walmart, a union-backed group that does not represent Walmart workers, but protests for higher wages.

TIFFANY BEROID, WALMART EMPLOYEE & OUR WALMART MEMBER: It isn't enough money for me to get by. It's very hard. We're at a standstill right now with my family.

HARLOW: Walmart's U.S. CEO said they pay a fair wage and are unfairly criticized.

BILL SIMON, PRESIDENT & CEO, WALMART U.S.: We pay above average wages for the retail industry. And we provide incredible opportunity. The discussion around the starting wage, minimum wage is one that the country needs to have. The debate needs to be had. But that's not the issue. The issue isn't where you start, it where you go to once you've started.

BEROID: Oh, you got two spelling --

HARLOW: Tiffany wants more opportunity, but at $10.70 an hour, she says she can't afford to work full time, given the child care costs she would need to cover. So, why doesn't she look for another job?

BEROID: I am actually not unhappy with my job. I like my job and I like being with the customers. It's not -- it's pointless for me to find a job. I would rather stay and fight. HARLOW: As for Joanna, her pay will go up in January when minimum wage in New Jersey increases to $8.25 an hour. She will still struggle but hopes her children's lives will be better.

CRUZ: It's not going to happen to my kids. I promise you that. It's not going to happen to my kids. It's just not. I won't allow it to.


HARLOW: I want to put this number out there for you. We crunched the data and what we found is that, last year, more than 12 million Americans working full time, full-time working Americans, took home just about $20,000. Keep in mind, that number, and that's more than minimum wage.

LEMON: Back when I started out working as a teenager, again, this was back in the '80s, 1981.

HARLOW: Right.

LEMON: That is the exact year, as a matter of fact, it was $3.35 an hour.


LEMON: But when I worked at McDonald's, it was for young people like me. There were temporary workers. These weren't full-time people trying to take care of families. What's going on here?

HARLOW; Increasingly, we're seeing more older Americans getting these jobs that previously were held by younger and younger people, like teenagers, et cetera. When you look at the data, it shows all the Americans that are making an hourly wage, nearly 50 percent of them who make at or below minimum wage are 25 years or older. And you can't dispute with those numbers.

LEMON: So, Joann -- is it Joann or Joanna?

HARLOW: Joanna.

LEMON: Joanna, the one who works at a deli, she admittedly said, listen, partially it's my fault, I didn't finish high school or college and I have kids. I should have finished high school or college.


LEMON: But hard times fall on a lot of people in this country and we used to be able to dig our way out of it, if we work hard enough. It is increasingly tough to do it in this economy, in this environment?

HARLOW: What we're seeing -- and you heard it from the U.S. CEO of Walmart, the mobility, the mobility, the access to move higher and get higher paying jobs, that is really a question right now.

But I'm glad you brought up Joanna because, yes, you can't just say this is all the fact that wages aren't high enough or the government should do more. She also takes personal responsibility --

LEMON: She also, right.

HARLOW: -- and made choices that she's trying to make up for now. But you heard her despair and lack of hope and saying, when I'm out of school, maybe I'll be 40 years old, who is going to hire somebody without experience. It's that question about mobility.

LEMON: I think people will hire here. I think she underestimates that. I know she's in a tough place now but I think there are companies who are looking for older, mature people, who realize, you know, take some personal responsibility and realize what's at stake because, you know, I came at this news game a little bit older, in my 30s, and --

HARLOW: And look at you now. I mean it.

LEMON: Yeah.

HARLOW: But I will say, to Joanna's credit, I spent a lot of time with her and she is a hard worker.

LEMON: She's a great mom it looks like.

HARLOW: Working overnights and taking care of her kids during the day and sleeping very little.

LEMON: Thank you, Poppy.

HARLOW: You're welcome.

LEMON: Appreciate it.

Let's do the math and see if it adds up here. My super-size panel is here, Austan Goolsbee, former chairman of the Council of Economic Advisors, also formerly with the White House; and Grover Norquist, the president of Americans for Tax Reform; and Christine Rousselle, web editor for and a former Walmart employee -- that's very important. We'll talk to her about that -- Alexis Goldstein, communication director for The Other 98% and a contributor to "The Nation."

I'll start off with you tonight, Grover.


LEMON: We're going to pick on a conservative tonight. I'm just kidding. Just kidding.

A full-time 40-hour a week worker making $7.25 an hour taking, two weeks off for vacation, $290 a week, $1160 a month, that's $14,500 a year. Do you think that's a fair wage?

NORQUIST: Look, we have a real problem here. There are a million people, fewer working today than when Obama took office. We've got a lot of jobs that have been lost. We need not only good starting jobs, but the opportunity to move forward, which is why, if you can get a job and hold it and move up the scale, that's very important. We need both economic growth and job opportunities. That's where the present economy is failing the American people. We're not creating the jobs we need to.


LEMON: But, Grover -- but, Grover --


NORQUIST: A million fewer American people working today than when Obama took over.

LEMON: Yeah, right. And I don't want to do the whole ideological thing. I don't want to play politics here.


NORQUIST: No, that's a number. That's not ideology.

LEMON: Do you think this is a fair wage? Can people live on $7.25 an hour?

NORQUIST: Well, I don't expect people to want work for $7 an hour for all of their lives. It is a better job opening, a first job, than no job at all, I suppose $7 is better than no job. Obama has left too many people with no job.

LEMON: Thank you for answering that question.

Christine Rousselle, you were a cashier at Walmart. Were you OK with what you were being paid?

CHRISTINE ROUSSELLE, WEB EDITOR, TOWNHALL.COM & FORMER WALMART CASHIER: Yes, I was, because I was a 19 and a 20-year-old with no skills whatsoever. I was in college and I was paid above minimum wage, and it was fairly basic work. It wasn't $15 an hour work by any means, and I thought it was a fair wage.

LEMON: What was your experience like working there? You thought it was a fair wage. Did the people around you think it was a fair wage being paid?

ROUSSELLE: The majority of my co-workers were like me, either in school or in high school still, and we didn't really talk much about salary. But I didn't hear anyone openly complain about what they were being paid. We were all pretty much in the same boat.

LEMON: Alexis, you have been watching these strikes taking place across the country, workers demanding $15 an hour. Is a protest the right way to go with doing this?

ALEXIS GOLDSTEIN, COMMUNICATIONS DIRECTOR, THE OTHER 98% & CONTRIBUTING REPORTER, THE NATION: I think it's an important approach because it allows workers to have a voice in this. What is important to remember about this is this is a fight that affects 30 million Americans, and 88 percent of the people who are currently making minimum wage are over 20 years old. We're not talking about teenagers any more. More than half of them work full time. So we're not talking about people working part-time any more. This is hard work that deserves a fair pay.

I was also a cashier. That was my first job out of school. This is physically taxing work and emotionally draining. It was the hardest job that I had. I worked seven years on Wall Street. It was more physically exhausting than my seven years on Wall Street.

I think what is important here to remember is, look, people can't make enough to survive so they're increasingly have to go to debt. At the top of the show, you mentioned investors are making huge amounts of money and people are getting these passive incomes that are coming in because they're shareholders. When people go into debt that enriches Wall Street. The old American dream used to owning a home. And the new American dream is simply getting out of debt.


GOLDSTEIN: We need to raise the minimum wage to change that.

LEMON: Austan, President Obama wants to change the minimum wage. But he will face a tough battle in Congress. Do you think that by putting more wages, higher wages into low-income people who are earning, do you think that boosts the economy?

AUSTAN GOOLSBEE, FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS & PRESIDENTIAL ADVISOR: I think one of the biggest problems that we face, certainly coming out of the worst recession of our lifetimes, but it really predates that. Through all of the 2000s, you had median family income. Just the family, right in the middle, falling $2,000 over the course of what was supposed to be the boom. And then the second blow to them was a terrible recession.

So, the hollowing out of the middle class and the fact that ordinary people, like the people on the segment, or, you know, millions of people around the country not being able to keep up is a big macro- economic problem. It's more than just a micro-problem facing their families. The fact that the number-one biggest problem facing small business in the country, by their own admission, is that people can't afford to buy their products. I think we got to confront that. If we don't start rebuilding the income growth coming from the middle, we don't have a sustainable growth model.

LEMON: We'll talk solutions in just a moment here.

But I want you to stand by.

Because in a minute, we're wondering why this is such a hot issue. We'll check out these McDonald's employees. They're exactly -- not exactly loving it.





LEMON: Hello, everyone. Welcome back. I'm Don Lemon. This is "The 11th Hour." Follow us on Twitter, @the11thhour.

America's divided over minimum wage. And my super-sized panel is back with me, Austan Goolsbee, the former chairman of the Council of Economic Advisors and also an advisor in the Obama administration; Grover Norquist, president of Americans for Tax Reform; Christine Rousselle, web editor for and a former Walmart employee; and Alexis Goldstein, communications director for The Other 98%.

I'll start with you, again, Grover.

Grover, I'm sure you know Ralph Nader wrote you a letter, right?

NORQUIST: He actually called about it. I haven't seen the letter, but I think he was in favor of having a minimum wage increase.

LEMON: I'm going to read some of it to you. So I want to read directly from the letter that he sent you. He said he sent it just a few weeks ago. He says, "Low wages at the 10 largest fast-food chains cost taxpayers $3.8 billion per year. At 52 percent of families of front line fast-food workers rely only on government assistance."

I'll ask you the same question he asked. He said, why should taxpayers shell out $1.2 billion a year to help McDonald's pay its workers?

NORQUIST: OK, I think Nader's point he is trying to make is that the government spends a great deal of money on welfare and he thinks that if you increase the minimum wage that that would change. Here's the challenge. We only have about 3,000 years of history of wage-and- price controls. They don't work very well. They have a very sad history. The National Recovery Act under FDR, they estimated that 500,000 people lost their jobs as a result of the 1933 minimum wage. Those are actually 500,000 African Americans. The unions in the Republic of South Africa under apartheid loved the minimum wage increase as a way to keep blacks out of particular jobs over there. It has a very bad history of keeping younger peep, disadvantaged guys, people trying to get their first jobs out of the work force. It's why unions have historically liked them.

LEMON: What is your point? What is your point here?


GOLDSTEIN: Grover, I find it really interesting that you are concerned about South Africa and how blacks were prevented from getting jobs because you were actually on the forefront of fighting the divestment movement during the '80s when apartheid was still a part of South Africa. So I find your concern over the South Africans during that time period to be a little bit questionable. And I also think that --


NORQUIST: Wait, wait, wait --


LEMON: Grover, quickly, because I want to keep you guys focused.


NORQUIST: I've seen that from somebody that the nation quoted somebody, not true. If you want to know my position, I'm perfectly willing to give it to you. I worked with a number of groups there that were trying to open up opportunities, particularly with a bus and taxi association because the apartheid government wasn't allowing blacks to operate taxies in and out of the major cities.

LEMON: OK, Grover, if something --


-- something falsely attributed to you and it's just not true. Let's move on now.

Austan, did I hear you sigh when Govern, his original response there?

GOOLSBEE: Yeah, a little bit. Look, the thing is, rather than look back 3,000 years, I don't know what the ancient Romans, Greeks or Egyptians thought about the minimum wage --


GOOLSBEE: -- but I do know that we have had minimum wages, earned income tax credits, a series of policies that have not kept up with inflation. So, if you thought that the minimum wage was going to be devastating to employment, then I think you kind of have to explain why, when we have raised the minimum wage, it hasn't been devastating to employment. Why, under the Bush administration, for example, as inflation eroded away minimum wages, why wasn't there a huge boon to employment as it was going the opposite way? And I think the thing that is the most problematic here is that we -- we know what are the things that lead to better paying jobs and lower unemployment. And a lot of those have to do with getting skills and education to the workforce. And, yet, when we say let's try to sponsor early education programs, let's not cut financial aid for people to go to college, let's sponsor training programs --

LEMON: So, there's a deeper --

GOOLSBEE: -- we get massive opposition. So, we're going to get locked into a situation where, like what we've seen in the last decade, you have a third of people at the bottom of the income distribution and they cannot get out of that.

LEMON: There is a deeper issue as to what happens, what gets us here in America. I understand that. But I want to stay focused on wages right here.

A real quick quote here: "Walmart is even worse." This is according to the House Committee on Education and Workforce Study. "Taxpayers are paying $1 million in supplemental benefits per Walmart store per year. If taxpayers are footing a bill of $1 million because of the low wages at 300 employees at a superstore -- that's about 300 employees at a superstore, 100 to 200 at a regular store -- think of how much Walmart is costing taxpayers each year at Walmart's 4,131 stores in the U.S." This is, again, from Ralph Nader's letter/

So, my question to you, Grover, should taxpayers allow this while Walmart posts $17 million in profits and enough excess funds to buy back $90 billion in the stocks over the past five years. So to think Walmart is going to pay their employees more and still not earn a profit when they were able to pay back $90 million and they had $17 billion in profit, I mean, it seems a little ludicrous to think that.

NORQUIST: Walmart has 1.3 million people working for it. One thing they do is they do hire and promote from within. 75 percent of their managers started off there. This is the company that trains and employs a great number of people.

The argument -- Ralph Nader, if he doesn't like the welfare state, if he thinks the 185 federal means-tested programs that exist today that give people money that don't require work in return, if he doesn't like those, he can criticize them. But that's not the fault of the rest of the world. The welfare state is expensive to taxpayers. There are better ways to do it. I think we should block grant it to the 50 states, as Clinton did with Aid to Families with Dependent Children. We should do it to the other major means-tested programs and see what works better.

LEMON: In all fairness to Walmart, they do pay their employees higher than many chain stores or big-box stores and a second or maybe a third to Costco, which pays its employees nice salaries.

GOLDSTEIN: But it's not substantially more. It's about an average of $8. And I think it's also important to remember here that Walmart spends an enormous amount of money lobbying against the minimum wage. They spent about $8 million on lobbying. Look, the Walton family, like the original Walton, may be able to take credit for creating this giant empire, but the six Walton members alive now inherited their wealth. They have more wealth than the entire 40 percent of Americans combined. The six members of the Walton family have more wealth and they spend a huge amount of their money ensuring that their workers don't make a real living wage.

LEMON: Yeah.

GOLDSTEIN: And I think Walmart is also a job killer. When you see Walmarts go into small communities, they get rid of some of the small businesses because they cannot compete with the lower prices.


GOLDSTEIN: For every two new jobs you create in a new Walmart, you kill three jobs in the areas where they --


ROUSSELLE: That's not true at all.


LEMON: Walmart is employing more people than small stores across the country. And, also, if you work there for a year, you actually do get benefits, which you may not get at a smaller store.


GOLDSTEIN: But if they're killing three jobs for every two jobs they create --


ROUSSELLE: But they're not.

LEMON: That's not true. They're not doing that.


LEMON: Stand by. Stay with me.


LEMON: When we come back, I want to ask you all, what is a true living wage in the United States today?

But, first, let Bill Maher weigh in.


BILL MAHER, HOST, REAL TIME WITH BILL MAHER: Now, when it comes to raising the minimum wage, conservatives say it's a nonstarter because it cuts into profits. Well, yeah, of course. Paying workers is one of those unfortunate expenses of running a business.




LEMON: Back now with "The 11th Hour" and my panel.

Guys, I have a negative two minutes left here. I have 30 seconds left.

Grover Norquist, first to you, what is living wage in America?

NORQUIST: It's more than what people are making now, a lot more, and we need to get there.

LEMON: Christine Rousselle?

ROUSSELLE: I don't think it's possible to determine what a living wage is. I think it depends where you are and what you live. It's going to be different in New York versus living in Maine. But --

LEMON: Alexis?

GOLDSTEIN: I think it's $15 an hour. And President Obama could do something for the two million federal contractors who work at the Smithsonian in the cafe. If he's really in favor of raising the minimum wage, he should do it for those two million federal contractors.

LEMON: Austan?

GOOLSBEE: I do think it depends where you live. But in my world, if you're working full time and you have at least one kid, you shouldn't be in poverty. That kind of tells you around what the level is. And you ought to be able to put your family on a path to get out of the situation.

LEMON: Right.

GOOLSBEE: So, some education, et cetera. So, I would peg it to that.

LEMON: One of you said that Walmart pays employees $8 an hour. According to them, their average is $12.81. Of course, that includes management down to cashier, box person, stock person, whatever the lowest employee to the highest there.

So thank you, all. I appreciate it.

Tomorrow on "The 11th Hour," we're going to see what extreme weather is doing to the animal kingdom.

That's it for us tonight.

Brooke Baldwin, "In Case You Missed It," starts right now.

BROOKE BALDWIN, CNN ANCHOR: Good evening. I'm Brooke Baldwin. And welcome to the second week of our new program. It's called ICYMI. Our mission here is to comb through every single story CNN has been covering all day all over the world to bring you the very best moments of what we do. Those are the moments when the meaning of a story suddenly becomes clear. It only happens a few times --