Call for Minimum-Wage Boost Revives Issue That Divides Economists
President Barack Obama's proposal Tuesday to raise the federal minimum wage is likely to rekindle debates over whether the measure helps or hurts low-income workers. White House officials say the move to boost the wage to $9 an hour, from $7.25, is aimed at addressing poverty and helping low-income Americans.
But the proposal likely will be opposed by Republicans and business groups, which have traditionally said raising the minimum wage discourages companies from hiring low-skilled workers.
Mr. Obama's proposal would raise the minimum wage by 2015 in several stages. After that, there would be an annual increase pegged to inflation. It comes as part of a package of initiatives White House officials are hoping will appeal to middle-class and low-income workers, many of whom have seen wages remain relatively flat—or even fall—in the past decade.
In 2008, while first running for the White House, Mr. Obama proposed raising the minimum wage to $9.50 an hour by 2011. But the White House never followed through with a push for changes in this area, and he hadn't brought the issue up again as president until Tuesday night. Administration officials believe the proposal would lead to higher wages for at least 15 million Americans by 2015, and possibly more because workers who earn just over the minimum might see a commensurate bump.Comment: The simple truth ... the government cannot decree wealth. Probably here in Minneapolis most "minimum wage" jobs are already at $ 9 an hour. I doubt it would impact many employers in this region. Most workers with some education and initiative can make more than the minimum wage. Why the government cannot decree wealth: An employer has to evaluate whether a laborer is worth the wage. There are other options: 1.) Not hire at all, 2.) Introduce efficiencies in operations. On the horizon is a robot that can flip burgers!
Another article: The impact of a $9 minimum wage
But employer groups say that raising the federal minimum wage would cost jobs, and hiking state rates doesn't help reduce poverty.
Studies have projected a loss of at least 467,500 positions were the hourly rate to go up to $9.80, according to the Employment Policies Institute, which advocates for employers. The most recent boost meant that 114,000 fewer teens had jobs.
"Tight margins -- keeping a few cents in profit from each sales dollar -- means that an employer faced with higher labor costs can't just absorb them," wrote Michael Saltsman, a research fellow at the institute, in an op-ed in the San Jose Mercury News last month.
Will it happen? Obama’s Agenda Seen as Dead in the Water by Republicans
“Minimum wage won’t pass the House, climate-change won’t pass the House,” Thune said. “Those are things he would probably have a hard time getting a lot of Democrats to vote for.”