Higher Gas Prices Require Higher Minimum Wage, Dems Say

By Randy Hall | July 7, 2008 | 8:22 PM EDT

(CNSNews.com) - Before leaving Washington, D.C., for the Memorial Day recess, Democrats in the U.S. Congress Thursday criticized Republicans for failing to "lower skyrocketing gas prices" and called for the GOP to show "real leadership" by raising the minimum wage.

"As Americans take their family cars out this Memorial Day weekend, it will be hard for the Republicans to go home and avoid talking about the issues that really matter to their constituents -- like $3-a-gallon gasoline that is emptying their wallets," said Sen. Chuck Schumer (D-N.Y.).

"While energy independence and relief at the pump is at the top of our agenda, Sen. Bill Frist (R-Tenn.) and the Republicans in Congress want to talk about anything but high gas prices -- because that would mean taking their big oil buddies to task," Schumer added.

"Every time we try to deliver real relief for American drivers, the Republican Congress says no," stated Sen. Bob Menendez (D-N.J.).

Republicans have "given us lots of talk," Menendez continued. "They've held press conferences, given speeches and talked until they were blue in the face about how we need to lower the price of gas, but when it comes time to actually do something, they are nowhere to be found."

Schumer and his fellow Democrats called high gas prices "one of the most pressing issues facing Americans, heading into the Memorial Day weekend driving season."

The Democrats also pointed to a new report issued by the liberal Center for American Progress (CAP) entitled "Double Whammy: High Gas Prices Hammer Minimum Wage Earners."

In the report, CAP Senior Economist Christian Weller and Economic Policy Intern Brennan Howell charge that "minimum wage earners today face the double whammy of spiraling gasoline prices and flat to minimal wage growth.

"The federal minimum wage of $5.15 per hour has not been raised since 1997," Weller and Howell state, while "gasoline prices, of course, are climbing rapidly. That hits low-income workers and their families particularly hard" because "gasoline eats up a larger share of their income.

"The combined result is striking," the report notes. "It now takes more than a day of work for minimum wage workers to earn enough money to fill their tank with gas.

"The public policy response to this deteriorating situation for Americans with the lowest incomes should be clear," Weller and Howell state. "Low-income families need immediate help. This can primarily come by raising the minimum wage," which would provide relief from "this painful double whammy."

However, H. Sterling Burnett, senior fellow of the conservative National Center for Policy Analysis (NCPA), dismissed the idea of raising the minimum wage to help people cope with high gas prices.

"I think you'd have to raise the minimum wage substantially to have any effect on the purchasing power of workers with the lowest income," Burnett told Cybercast News Service. "If you're talking about a 25-cent-per-hour increase, that wouldn't buy you an additional two gallons of gas for the week."

Burnett also noted that boosts in the minimum wage often force employers to lay off some workers to offset the increase in the remaining employees' salaries, which puts the people who lose their jobs "in a much, much worse position."

While acknowledging that "Congress has the power to regulate interstate commerce," Burnett advised legislators not to pass a law setting the price of gas at artificially low levels.

"If you cap prices here, the oil that's sold on the world market will just go elsewhere, where people are willing to pay the market price for oil," he stated.

During the Democrats' Thursday news conference, U.S. Rep. Bob Etheridge (D-N.C.) stressed the need for the country to achieve energy independence.

"The answer to our fuel crisis is growing in our fields," Etheridge noted. "Bio-fuels provide the opportunity not only for a stable source of affordable fuel, but also for jobs for rural America" since "every dollar we invest in bio-fuels production is a dollar that stays in America and benefits our economy."

As Cybercast News Service previously reported, Sen. Hillary Clinton (D-N.Y.) also called for increased use of bio-fuels as part of an "energy revolution" based on innovation and efficiency.

But, Burnett of the NCPA disagreed that bio-fuels provide the key to energy independence.

"There is no credible analysis out there that says we can produce enough bio-fuel -- bio-diesel and ethanol combined -- to replace substantial amounts of oil in the next 10 years," he said.

In addition, "most gas stations don't have the technology to store ethanol properly," Burnett noted. If stations "don't have tanks that prevent water from separating from ethanol, that water can get into cars' gas tanks" and destroy the vehicles' engines.

"This is thousands of dollars in car repair," he said. "And guess what? Congress isn't picking up the bills. You tell me how that affects the working man. If I'm a wealthy person, I can afford a new engine. If I'm poor, I can't.

"It's just not clear to me that the Democrats are offering anything credible," Burnett stated. "The only way to really lower gas prices over time is to improve supply -- or cause a recession so demand declines.

"Maybe that's the Democrats' new plan," he added.

See Earlier Story:
Clinton Seeks 'Energy Revolution' Fueled by Tax on Oil Profits (May 24, 2006)

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