AUDIE CORNISH, HOST:
As we mentioned earlier, it's not just Birmingham. In the last few years, more than 30 cities and towns have set a minimum wage higher than the federal law. And some places, like L.A. and Seattle, are on a path to make their minimums $15 an hour. It's a move supported by the Obama administration, which has had zero success getting Congress to increase the federal minimum wage of $7.25 an hour. Joining me now in the studio is Labor Secretary Thomas Perez to talk more about it. Welcome.
THOMAS PEREZ: Pleasure to be with you and your listeners.
CORNISH: Now, is this essentially admitting defeat, right? If Congress won't work with you, is the administration left to kind of nibble around the edges at that this issue and just boost the efforts down at cities and state level?
PEREZ: Well, we're certainly not admitting defeat. We're continuing to fight for the 12 by 20 minimum wage proposal of Congressman Bobby Scott and Sen. Patty Murray. And at the same time, we're setting the example at the federal government. So if you want to do business with the federal government, you have to pay a decent minimum wage - $10.10 - now it went to $10.15. And we're continuing to work with state and local governments to do the same. And when I listened to the story that your listeners just heard about Alabama, you know, this is, frankly, you know, rank hypocrisy and destructive politics at its worst. And what it really is is that the same powerful, Tea-Party-inspired forces who've stymied process here in Washington have taken their case out to the states, and a number of states are fighting progress. And for me, the irony is that the Republican Party, which, you know, believes in limited government, local control and respecting the will of people, they do so until the will of the local people - they're trying to fight inequality, like the people in Birmingham.
CORNISH: But as you said, it works both ways, right? Local control states or local control - they can decide what's right for their job market. And maybe that means some of them don't want cities creating a patchwork of policies within their borders.
PEREZ: Well, actually, in Alabama, under the Alabama Constitution, as I understand it, Birmingham has home rule. And the irony of it is, you know, the congressman - or the House representative, Mr. Faulkner, who we heard from a few minutes ago, I mean, he represents Mountain Brook. The poverty rate in Mountain Brook is 2.6 percent. It's 97 percent white community. The median household income is the highest in the state of Alabama. The poverty rate in Birmingham is 31 percent. It's 70 percent African-American. They have a poverty rate of 31 percent, a childhood poverty rate of 50 percent. I think, with all due respect to Rep. Faulkner, that the people of Birmingham are in the better position to determine what's best for Birmingham. And I found it ironic - he said, I don't know if cities are equipped to analyze and determine what the appropriate minimum wage is or what those impacts are. With all due respect, I think the people of Birmingham are pretty smart. I think the minimum-wage workers who've been working a full-time job and getting their food at the food pantry, they're pretty smart. I think the representatives there can do that.
CORNISH: But to stop you here for a second, because this data is not settled yet, right? I mean, we have cities that have just started passing these things, and we're just now really weighing the effects. And, you know, is there a danger in creating competition between suburban, urban, rural areas, right, where you have - a company or employers can move out of a city, right? Back to where you started - hurting the workers you're worried about.
PEREZ: Actually, the first experiment in this, Audie, occurred in a community in New Jersey, which was right across the border from a community in Pennsylvania. One community raised their minimum wage. And the argument against it was the community with a higher minimum wage is going to get hurt. An economist who later became the president's chief economic advisor, Alan Krueger, studied that issue under the theory that Mr. Faulkner was right. What he found was Mr. Faulkner was not right. People said, oh, that's only one community, so the replicated this study in 250 to 300 match-paired communities and found that when you raise their minimum wage by reasonable rates, which is what they're doing in Birmingham, it doesn't have that impact. And what it does is it produces a workforce that's more loyal because they're getting paid a decent wage. It's Henry Ford economics. When you put money in people's pockets, they spend it. It creates shared prosperity. So this is really - aside from being rank hypocrisy, this is bad economics.
CORNISH: But before I let you go, essentially what we're witnessing is a national public policy experiment, right? We're really going to know in a few years how this is all going to play out if we have different cities and states and towns doing different things here.
PEREZ: Well, we've already seen it. And what's important to keep in mind on the minimum wage is that there's been overwhelming bipartisan consensus historically. Every president except two since FDR, who signed the first minimum wage bill, has raised the minimum wage. Arkansas, South Dakota, Nebraska, Alaska raised the minimum wage by voter referendum. People understand that you can't make a living off of $7.25 an hour. And the people of Birmingham made the right call. And the people in the suburb next door shouldn't be able to overturn them. That's not fair.
CORNISH: That U.S. Secretary of Labor Thomas Perez. Thank you for coming in to speak with us.
PEREZ: Pleasure to be with you and your listeners.
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