For the second week in a row President Barack Obama dedicated his weekly address released Saturday morning, Feb. 22, 2014 to raising the minimum wage, and urging Congress to pass legislation to that would lift the wage up from $7.25 to $10.10 for all American workers by 2016. President Obama has renewed advocating raising the minimum since his State of the Union address when he announced his economic opportunity program. He followed through by raising the minimum wage for federal contractors through an executive order on Wednesday afternoon, Feb. 12.
President Obama began his weekly address entitled "Time to Lift the Minimum Wage and Give America a Raise" explaining the mission of his economic opportunity program. The president introduced; "Restoring the idea of opportunity for all requires a year of action from all of us. Wherever I can act on my own, I will - and whenever I can ask more Americans to help, I'll do that too." The economic opportunity program has four parts, creating good paying jobs, technical job training programs, education initiatives from Pre-K to college, and raising the minimum wage.
Revisiting his State of the Union delivered a month ago, Tuesday, Jan. 28, the president recounted both the strides and set backs of the economic recovery; "I asked more business leaders to take action to raise their employees' wages. Because even though our economy is growing, and our businesses have created about eight and a half million new jobs over the past four years, average wages have barely budged."
Speaking at the North American Leaders Summit in Toluca, Mexico on Wednesday, Feb. 19, Obama praised the clothing store the Gap for raising the starting wage they pay their employees; "I applaud Gap Inc. for announcing that they intend to raise wages for their employees beginning this year - a decision that will benefit about 65,000 workers in the U.S." Gap is raising their wages from "$9 per hour in 2014" to "$10 per hour in 2015" at all their six different store chains.
The president again commended Gap for their decision to raise their wages in his weekly address; "earlier this week, one of America's largest retailers, The Gap, decided to raise wages for its employees beginning this year. Their decision will benefit about 65,000 workers in the U.S. That means more families will be able to raise their kids, finish their studies, or keep up on their bills with a little less financial stress and strain."
President Obama has been highlighting companies and employers that choose to pay the employees more than the legal minimum wage. When Obama went on his post State of the Union economic opportunity tour, he chose to speak at Costco, another store that pays more than the minimum wage to their employees; at Costco their starting pay is $11.50 an hour, the average is $20.
The president has been rationalizing the need to raise the national minimum wage by arguing that it is beneficial to the economy; "raising Americans' wages isn't just a good deed; it's good business and good for our economy. It helps reduce turnover, it boosts productivity, and it gives folks some more money to spend at local businesses."
This past week on Tuesday, Feb. 18 however, the non-partisan Congressional Budget Office (CBO) released a report of the affect of raising the minimum wage that does not appear as optimistic about the ramifications of raising the minimum wage. The report determined that 16.5 million Americans would see a bump in their wages from a nationwide raise, with 900,000 Americans lifted above the poverty level however, jobs would be cut to 500,000 workers or 0.3 percent, a no win situation. The CBO concluded; "The increase in the minimum wage would have two principal effects on low-wage workers: The large majority would have higher wages and family income, but a much smaller group would be jobless and have much lower family income."
The CBO report also stated the numbers could vary with more or less jobs lost as a result of the raise; "As with any such estimates, however, the actual losses could be smaller or larger; in CBO's assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers."
Speaker of the House John Boehner, R-OH has been emphasizing all along through the debate that jobs would be lost from raising the minimum wage. The speaker's spokesman Brendan Buck issued a statement by email after the CBO report was released; "This report confirms what we've long known: while helping some, mandating higher wages has real costs, including fewer people working. With unemployment Americans' top concern, our focus should be creating - not destroying - jobs for those who need them most."
Democrats are skeptical about the CBO's findings, stating economist have determined that no jobs would be lost in the process. House Minority Leader Nancy Pelosi, D-CA stated; "[CBO's] conclusions contradict the consensus among hundreds of America's top economists. What's more, in past years, the CBO itself has acknowledged the uncertainty of its own predictions and ignored new perspectives in the wide array of analysis on the minimum wage."
The CBO looked at two different scenarios for the analysis, raising the minimum wage from $7.25 to $9 with two raises in 2015 and 2016 without accounting for inflation, and looking at a raise from $7.25 to $10.10 over three years, reaching the maximum in 2016 while be "indexed for inflation."
President Obama made his own attempt to remedy the situation by signing an executive order on Feb. 12 raising the minimum wage for new contracts for federal workers from $7.25 where it has been since 2009 to $10.10 at an event in the White House's East Room where he was surrounded by workers who would benefit from a raise in the minimum wage.
Obama again mentioned that executive order in his weekly address; "And as a chief executive myself, that's why I took action last week to lift more workers' wages by requiring federal contractors to pay their employees a fair wage of at least $10.10 an hour." The President's order will only benefit approximately 2 million workers taking effect on Jan. 1, 2015 and specifically for new and replacement contracts.
This past Friday, Feb 21 the president also spoke to the Democratic governors at the White House prior to the annual National Governors Association meeting in Washington this weekend. Obama along with Vice President Joe Biden spoke to the Democratic Governors Association about economic policy.
Obama also discussed another way to raise the minimum wage for many Americans through bypassing a reluctant Republican Congress. President Obama is convincing the democratic governors to raise the minimum wages in their states. The president told the governors; "This is not just good policy. It also happens to be good politics. Because the truth of the matter is the overwhelming majority of Americans think that raising the minimum wage is a good idea."
New Jersey raised their minimum wage this past year through a public referendum and despite their Republican Gov. Chris Christie's objection. Obama was not shy mincing words about Christie's opposition; "For example, in New Jersey, even though the Republican governor opposed it, it passed by 60 percent." At the Democratic governors’ campaign committee dinner on Thursday evening, Feb. 20 Obama criticized Christie, but praised California Jerry Brown for being the first governor to raise the minimum to $10.
The president mentioned in his weekly address that after he called for a raise in the minimum wage in 2013 State of the Union, six states raised the minimum wage within their states. So far six states have raised the minimum wage including; "California, Connecticut, New Jersey, New York and Rhode Island," and 14 others are considering do the same. Obama recounted; "In the year since I first asked Congress to raise the minimum wage, six states have passed laws to raise theirs, and more states are working on it as we speak." The state raises will help Americans, but according to the president it is not a complete solution to the problem.
Obama acknowledged the limits to raising the minimum wage without Congress, who are the only legislative body that can universally raise wages, stating; "But only Congress can finish the job and lift Americans' wages across the country." Continuing the president again reminded Americans that there is bill to raise the minimum wage languishing in Congress; "Right now, there's a bill before Congress that would boost America's minimum wage to $10.10 an hour. That's easy to remember - "ten-ten." That bill would lift wages for more than 16 million Americans without requiring a single dollar in new taxes or spending."
The bill proposed to raise the minimum wage was sponsored by two Democrats, Iowa Senator Tom Harkin and California Representative George Miller.Senate Majority Leader Harry Reid, D-NV has promised the President that he will put raising the minimum wage to a vote in March. The bill would face opposition in the Republican House of Representative from the Speaker John Boehner, R-OH who has numerous times stated that raising the minimum wage will result in less jobs for the lower income bracket.
President Obama attacked the Republican Congress for their unwillingness to raise the minimum wage, despite broad support throughout the country for this legislation. Obama chastised; "But even though a majority of Democrats, Independents, and Republicans across the country support raising the minimum wage, Republicans in Congress don't want to give it a vote."
According the White House the president's plan for increasing the minimum wage in "three steps" which would raised the minimum wage to $10.10 by 2016, and would raise tax credits, and have legislation indexing the minimum wage so it will automatically be raised to meet inflation and the rise in cost of living.
The executive order President Obama signed also raises the minimum wage for tipped workers from $2.13 an hour to $4.90, with a raise each year of 95 cents until as the White House Fact Sheet explains; "it reaches 70 percent of the regular minimum wage" and if it the tips do not cover the regular minimum wage, "the employer will be required to pay the difference."
The executive order also ensures that all contract workers with disabilities are all guaranteed the new minimum wage and cannot be paid less effectively obliterating a 1938 law where as USA Today explained "employers could pay certain disabled workers subminimum wages." As the President declared; "This principle doesn't apply to some of us. It applies to all of us."
The president concluded his weekly address urging Congress to raise the minimum wage, and the American public to press Congress for action; "Hardworking Americans deserve better than "no." Let's tell Congress to say "yes." Pass that bill. Give America a raise. Because here in America, no one who works hard should have to live in poverty - and everyone who works hard should have a chance to get ahead."
The Effects of a Minimum-Wage Increase on Employment and Family Income, Congressional Budget Office, Feb. 18, 2014
President Barack Obama's Remarks at DGA Dinner, Feb. 20, 2014
Bonnie K. Goodman is the Editor of the Academic Buzz Network, a series of political, academic & education blogs which includes History Musings: History, News & Politics. She has a BA in History & Art History & a Masters in Library and Information Studies, both from McGill University, and has done graduate work in Jewish history at Concordia University as part of the MA in Judaic Studies program. Her specializations are US, Canadian & Israeli politics.