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SOTU Proposal Opens Up Minimum Wage Debate

Feb. 13, 2013 7:38pm Christopher Santarelli

A notable policy proposal from President Barack Obama’s State of the Union address Tuesday was a call to raise the federal minium wage to $9 per hour from $7.25, and to automatically adjust it with inflation.

We know our economy is stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher.

Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour.

The federal minimum wage was last raised through Congress in July 2009 from $6.55 to $7.25, and before 2007, the wage had been stuck at $5.15 per hour for ten years. Eighteen states and the District of Columbia have since raised their minimum wages higher than the current federal standard. The New York Times reports that Obama’s proposal would raise the minimum wage to $9 in stages by the end of 2015. The president argues the move would help close the income gap without raising the unemployment rate or putting undue pressure on business, but Republicans like House Speaker John Boehner argue the change would cost jobs and lower wages across the board.

“When you raise the price of employment, guess what happens? You get less of it” Boehner said Wednesday. ”At a time when the American people are still asking ‘where are the jobs?’ Why would me want to make it harder for small employers to hire people?”

“Any discussion about raising the minimum wage needs to recognize that small employers often have to operate under very slim profit margins,” Washington Post reports Chamber of Commerce Senior Vice President Randy Johnson said. “An increase has to be shouldered by the employer, who may have to spread it out over many employees. Too often that reality is left out of the discussion, as it was last night. We will look at the proposal, consult with our membership and react accordingly.”

On ‘Real News‘ the panel debated where both sides could possibly come together on this issue, and whether the proposal is serious or a way for the president to win support by teasing low-hanging political fruit:

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Comments (6)

DougHuffman
Posted on February 14, 2013 at 8:12am
Well, no, there is no debate that minimum wage is merely an inflation pump, another one.

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JACKTHETOAD
Posted on February 14, 2013 at 1:11am
First, it was disbanding the Jobs Council (insert hearty laugh here), and now this, which will be another kick in the teeth to the economy. …the gloves are really off now.

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- JRook
  Posted on February 14, 2013 at 9:22am
  Ok perhaps it is hard to follow but consumption equates to demand and it is demand, NOT THE WEALTHY, that drives the economy and creates jobs. The wealthy, like union pension funds, equity funds merely invest in companies to meet that demand. The real wage problem in the US is not the minimum wage but the compression of wages above that level. My son worked in a nursery during his summers in high school and he was paid $8.50 an hour. About the same I was paid in the mid 1970′s as a summer laborer for a mason and as a summer hire in a NON-UNION paper mill. So over the 30 plus year figure the wage for a summer hire remained level. Now in the mid 1970′s you could buy a new Opel GT for $4,100, an equivalent car at the time to a Mazda Miata now, which of course costs about $22,000 – $ 25,000. The result is a progressive reduction in real demand particularly in terms of how diverse and broad the spending is. When a disproportionate amount of earnings in taken up by housing, transportation and energy, spending and thus demand for other items will decrease. There is no question that from a macro economic standpoint the two things that are dampening demand in the US is the drop in real wages and the concentration of wealth. But I realize those that are shackled by their ideology would never want to accept such a reality.
  
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Bikkiboo
Posted on February 13, 2013 at 10:23pm
Where does it say that the minimum wage is supposed to support a family? I always tho’t it was a “beginner’s” wage; an entry level wage. If you have a family of two kids and you’re still working for minimum wage, you shouldn’t be having a family because you haven’t educated/trained yourself enough to earn the money needed to raise a family. If you don’t like working for minimum wage, go back to school, get on-the-job training, become an apprentice, take some night courses! Good grief, why would you ever EXPECT to support a family on minimum wage?
Check the history of the minimum wage: it originally was set to keep the low skilled OUT of the job market completely. It wasn’t meant to help the poor; it was meant to keep the poor from earning money so they would starve and die! Check it yourself. This was one of the early “progressive” ideals.

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- lovenfl3
  Posted on February 13, 2013 at 10:37pm
  Unfortunately the low information voters in this country will never understand how raising the minimum wage impacts product cost and employment. They’re also the ones most impacted by the negative impacts on both. These are amazing times.
  http://www.youtube.com/watch?v=MWXvinHwwoo
  
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- Advection
  Posted on February 13, 2013 at 11:16pm
  Some jobs aren’t worth $9/hr. Some people aren’t worth $9/hr.
  
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