Sen. Elizabeth Warren made her first visit to Iowa this past weekend after announcing the formation of her presidential exploratory committee. And during the three-day trip, the Massachusetts Democrat’s message centered around addressing two major problems: economic inequality and the influence of money in politics — with the latter often driving the former.
“Every issue that we face — gun safety, environmental disaster, student loan debt, Social Security — they all intersect at this problem of corruption, they all intersect at a Washington that is working for the wealthy and well connected, and not for you,” Warren said during her first event Friday evening in Council Bluffs.
One other issue you could add to the list: the minimum wage.
“When I was a kid, a minimum wage job in America would support a family of three. It would pay a mortgage, keep the utilities on, and put food on the table,” Warren said during the same event.
“Today, a minimum wage job in America will not keep a momma and a baby out of poverty,” she said.
It was a point that Warren has made before and repeated during multiple appearances during her Iowa swing.
Elizabeth Warren blazed the 2020 trail on Saturday with speeches in Iowa, where she targeted income inequality: “Today, a minimum wage job in America will not keep a mama and a baby out of poverty” https://t.co/vpJg2EjN9m pic.twitter.com/qyPjzOHkPT
— CBS News (@CBSNews) January 6, 2019
However, the anecdote also attracted some pushback from the right.
“This is false,” Phil Kerpen, the president of the free-market think tank American Commitment and former policy vice president of the Koch brothers-backed American for Prosperity, flatly wrote in a tweet Saturday.
Is it though?
The answer is that it depends on how exactly you measure it.
According to the U.S. Census Bureau, the poverty threshold for an adult with one child is $16,895.
Kerpen went on to tweet a chart from the Goodman Institute, another right-wing policy group, showing that an adult working a full-time job for $7.25 an hour, the federal minimum wage, would see their annual income of $15,000 increase to $20,548 when taking into account both the earned income tax credit and child tax credit.
— Phil Kerpen (@kerpen) January 5, 2019
The analysis left out income taxes and Social Security and Medicare taxes, which could, depending on local state income taxes, add up to as much as $2,000 for a person earning $15,000 a year. Still, even when deducting $2,000, the $20,548 figure Kerpen cited would remain above the poverty threshold.
Warren’s team says this type of critique is misleading on multiple fronts — and misses the larger point.
Since the earned income tax credit and child tax credit are not included in the federal government’s calculations of the official poverty thresholds (nor did they even exist when Warren was growing up), they say it’s misleading for conservative sources to selectively apply it in this case.
Research has also shown that up to 20 percent of otherwise eligible taxpayers fail to claim the earned income tax credit due to its qualifying criteria. The Goodman chart also leaves out other public programs, like child, food, and energy assistance programs.
Additionally, Warren’s team says her anecdote is an apples-to-apples comparison of how the minimum age alone could keep a family of three afloat when she was growing up in the 1960s and how it cannot even support a mother and child now.
“That’s what this is all about,” Warren said in Iowa. “Back when I was a kid, folks in far-off Washington asked the fundamental question: ‘What’s it going to take for a family of three to make it? That’s where we ought to put the minimum.’ Today, the folks in Washington ask, ‘What’s going to improve the profitability of a multi-national corporation?’ And that’s what we’re here to change.”
Plus, it’s not like $20,000 a year is a comfortable life.
According to MIT’s living wage calculator, $20,000 is still not enough to make ends meet for a single adult with one child. And even earning twice that much in a year doesn’t necessarily make things easy. The Federal Reserve reported in 2017 that 41 percent of individuals (and 49 percent of families) making less than $40,000 face financial challenges.
Some experts say the current poverty line is based on outdated data and likely understates what the real threshold should be. The Congressional Research Office wrote in 2015 that while the pre-tax measure fails to capture the effect of tax credits and programs meant to address poverty, the threshold reflects a “measure of economic need based on living standards that prevailed in the mid-1950s.”
“If the same basic methodology developed in the early 1960s was applied today, the poverty thresholds would be over three times higher than the current thresholds,” the public research service wrote.
Meanwhile, the federal minimum wage is worth less than it was a half-century ago, when it peaked at $11.76 in inflation-adjusted 2018 dollars. Additionally, the $7.25 hourly rate has lost more than a dollar in value since it was last raised in 2009.
In Warren’s recent book “This Fight is Our Fight,” she wrote that she is “pretty hard-core” about raising the minimum wage.
“At $7.25 an hour, a mom working a forty-hour-a-week minimum-wage job cannot keep herself and her baby above the poverty line,” Warren wrote. “This is wrong— and this was something the U.S. Congress could make better if we’d just raise the minimum wage. We could fix this now.”
The Bay State senator has repeatedly co-sponsored Sen. Bernie Sanders’s legislation to phase in a $15 federal rate by 2024.
According to the Department of Labor, 29 states and Washington, D.C., now have minimum wage rates that are above the federal $7.25 rate, covering more than 60 percent of American workers. Massachusetts Gov. Charlie Baker signed a bill last year to incrementally raise the state’s minimum wage to $15 by 2023.