raising the minimum wage for new federal contracts. The order requires contractors to pay employees

at least $10.10 an hour. At the signing, the president did not miss the opportunity to

call Congress to do the same nationwide.

BARACK OBAMA: There's a right now in front of both the House and the Senate that would

boost America's minimum wage to $10.10 an hour--just like I'm doing with this executive

action. It's easy to remember: 10-10--10-10. Let's get that done. Raise the federal minimum

wage to $10.10 wouldn't just raise wages for minimum-wage workers, its effect would lift

wages for about 28 million Americans. It would lift millions of Americans out of poverty

immediately. It would help millions more work their way out of poverty--without requiring

a single dollar in new taxes or spending.

DESVARIEUX: But in this picture-perfect moment, you can see in the background a group of low-wage

workers. One of them is Arthur Helms. As a Wendy's employee making about $9 an hour,

Arthur's been on the front lines fighting for a higher wage before it became a talking

point on Capitol Hill. He says this raise is a jump-start but not the finish line.

ARTHUR HELMS: Actually, I don't think $10 will get you out of poverty. I don't think

$12 will get you out of poverty. I mean, $15 can be a better start. You know. But the $10,

it's a jump-start.

DESVARIEUX: A jump-start is how many in the wage movement are framing the news, especially

in light of major corporations, like the Gap, announcing that they will be raising their

minimum wage to $10 an hour next year.

But if you factor in the $8.7 billion in cuts to food stamps, would raising the minimum

wage to $10 an hour get a working parent out of poverty?

The Real News sat down and did the math with Cheria Cash. She's a 31-year-old single mother

who was hired full-time at McDonald's and on food stamps.

CHERIA CASH: I work at McDonald's in Pittsburg, P.A., and that's on the north side. And they

pay me $7.70.

DESVARIEUX: Making $7.70 an hour, Cheria says that she usually only gets 30 hours of work

a week. That comes out to $231 of gross weekly income. After she pays Social Security, taxes,

and Medicare, she says that she only takes home $380 every two weeks, or about $820 a

month, if she works the full 52 weeks a year. She also has a teenage son and receives $326

a month in food stamps.

Before she receives her earned income tax credit, her monthly income and food stamp

benefits total $1,149.

CASH: When you think about it, it's like, gosh, it costs more to get to work this week,

and I didn't even make that much. You know? Like, I spend my whole check to get back and

forth to work or to eat. You know? So it's not even about going out or anything like

that. It's just basically surviving, you know?

DESVARIEUX: Now let's see how she survives with earning $10.10 an hour. Her weekly gross

income would get boosted up to $303 a week. Her monthly income would jump to $1,076. With

the same food stamp benefits of $326 a month, and not including the couple of thousands

for earned income tax credit, Cheria would have $1,402 a month to live on.

Fortunately for Cheria, she is not one of the 850,000 households who will see an average

cut of about $90 a month to their benefits. That's according to the nonpartisan Congressional

Budget Office, since she does not receive heating assistance.

But after looking at both situations, we asked an economic analyst if Cheria has made it

out of poverty by earning $10 an hour?

DAVID COOPER: For a parent with one child, the federal poverty line is about $15,700.

So right now she's definitely below the poverty line. If the federal minimum wage went up

to $10.10, her income would go up significantly. Her pre-tax income annually would probably

be right around that $15,700 mark. So she'd probably be just above the poverty line or

right near it.

DESVARIEUX: But though Cheria seems to squeak right above the poverty line, David Cooper

says that the federal poverty line is not the most accurate measure of the reality of

today's cost of living.

COOPER: The poverty line was developed in the late 1950s. And what they did at that

time is they basically said, well, what does it cost to buy sort of your basic essential

bundle of food? And people tend to spend about three times more than that in total on everything

else that they're buying. So we'll set the poverty line at basically three times the

cost of what it takes to buy food. Now this is food in the 1950s, and since then, you

know, the prices on things like health care and housing in particular have gone up a lot

faster than the price of food, but we've only adjusted the poverty line based on overall

inflation. So that means that today's poverty line is really not a very accurate measure

of what it actually takes for someone to live.

DESVARIEUX: To account for people's actual living costs, EPI devised a tool called the

Family Budget Calculator. We decided to try it out based on Cheria's family size and the

fact that she lives in the city of Pittsburg.

COOPER: For one parent and one child, we estimate it takes an annual income of about $48,000

to have a modest but secure standard of living. Right now she has an income of about $12,000-$13,000

total.

DESVARIEUX: It's discrepancies like this one that have led to broad public support for

raising the minimum wage. According to a Quinnipiac poll last month, 71 percent of American voters

support raising the minimum wage.

But Republicans are ready to fight back the $10 wage, especially considering the recent

report from the nonpartisan Congressional Budget Office.

The report states that the $10 an hour wage hike would get 900,000 families out of poverty

and increase the incomes of 16.5 million low-wage workers in an average week.

But the wage hike could also cause the economy to lose half a million jobs.

DOUG ELMENDORF: The set of research studies in this area led us to conclude that an increase

in the minimum wage would probably have a small negative effect on employment, but there

was substantial uncertainty around that estimate, as we reported.

DESVARIEUX: The CBO's uncertainty is what Howard University economics professor William

Spriggs points to as one of the weaknesses of the report.

WILLIAM SPRIGGS: They cited many, many reviews of the literature on minimum wage, all of

which show either no loss of jobs, small gains in jobs, or very tiny losses of jobs. And

for them to have chosen a very sensitive reaction to the increase in the minimum wage just doesn't

line up with the studies that they cite. So I'm taking their 500,000 with a huge grain

of salt. For me, that's beyond the worst-case scenario. I would only give that a 2 percent

chance of happening.

DESVARIEUX: Professor Spriggs says that raising the minimum wage would lift millions out of

poverty. But it wouldn't get all full-time workers out of poverty. Therefore, he says,

the minimum wage should really be pegged to productivity and start at $15 an hour.

SPRIGGS: We really need it to be $15. The reason we need it to be $15 is the bigger

picture here, is that wages for all workers have been stagnant if not falling back, even

for skilled workers and the most skilled workers.

So take electricians as an example. They don't face imports, 'cause if you're hiring an electrician,

you can't import one, and they rarely face competition from people who migrate to this

country. But even the top 10 percent, the very highest paid electricians, have seen

their wages go backwards this last decade.

So even skilled workers in the United States are seeing their wages slide backwards. They

aren't keeping up with productivity.

And we know that the gap is over 30 percent between where wages and productivity were

in the late 1970s and where they are today. So if we had kept the minimum wage constant

with productivity increases, then the minimum wage, if you had kept it from the 1970s to

today, 1968 to today, the minimum wage would be somewhere close to $20 an hour.

The $15 an hour says, okay, very low wage workers aren't as productive as is the average

for the economy, so we think that they've only got about half as productive. They would

get $15 an hour.

And it's that gap between wages, between what people take home and what they're producing

for companies, that is creating the underlying problem that we have in our economy, because

if you can't make enough money to buy what you just made, it means I don't need you,

'cause I can't sell what you just made. So it's kind of common sense. It's what Henry

Ford said. You know, I can have these really productive autoworkers on this line and I

can make thousands of cars, but if nobody can buy the car, what does that mean? So I

got to pay somebody so they can buy the cars. Same thing is true today. And we've walked

away from the relationship between productivity and wages.

Productivity is up. Wages are not. Gaining the minimum wage to $15 and then linking it

to productivity would mean that we would have a way to restore the relationship between

wages and productivity.

DESVARIEUX: Workers like Cheria in the Fight for 15 say $15 an hour would allow them to

invest in the future.

CASH: If you give us $15, I know I'll be able to buy a pair of shoes more than once a year.

I won't have to wait for my income tax money to buy stuff. I could actually save my income

tax money and put that towards, like, my son's education.

DESVARIEUX: Hopes for a $15 wage may seem farfetched, as Congress cannot settle on a

$10 wage increase. But Democratic Senate majority leader Harry Reid says he will bring the minimum

wage $10.10 bill to the Senate floor for a vote next month.

Congress may attempt to compromise, considering the CBO's companion analysis of a $9 minimum

wage.

But considering $10 will barely get Cheria above the federal poverty line, $9 will certainly

have her coming up short--again.

For The Real News Network, Jessica Desvarieux, Washington.