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Obama Calls for Raising Minimum Wage to $9 Per Hour in State of the Union

Pat Garofalo
Think Progress / News Report
Published: Wednesday 13 February 2013
According to a fact sheet released by the administration, “Raising the minimum wage to $9 restores the inflation-adjusted value of the minimum wage back to where it was in 1981.” If the minimum wage had simply kept up with inflation since the 1960s, it would be over $10 per hour today.
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In his State of the Union address last night, President Obama calls for raising the minimum wage to $9 per hour, up from its current $7.25. He also called for raising the tipped minimum wage — made by tipped employees, such as waitresses — and for indexing the minimum wage to inflation so that it grows along with the economy:

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’ve 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, nineteen 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. This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets.

In fact, working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher. So here’s an idea that Governor Romney and I actually agreed on last year: let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on.

According to a fact sheet released by the administration, “Raising the minimum wage to $9 restores the inflation-adjusted value of the minimum wage back to where it was in 1981.” If the minimum wage had simply kept up with inflation since the 1960s, it would be over $10 per hour today.

Currently, the minimum wage does not lift a family of three out of poverty and its covering a much smaller percentage of health care and education costs than it used to. Raising the minimum wage also disproportionately helps women and minorities, since they make up a majority of low-wage workers.

Conservatives usually oppose minimum wage increases on the grounds that they will hurt small businesses and job growth. However, study after study has shown that raising the minimum wage does not have a negative effect on employment. In fact, an analysis of state minimum wage increases showed that those state boosting their wage “had job growth slightly above the national average.” This holds true even when the economy is weak.

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ABOUT Pat Garofalo

Pat Garofalo is Economic Policy Editor for at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

Raising minimum wage just

Raising minimum wage just adjusts for what he stole/taxed via quantitative easement: i.e., counterfeiting trillions of bailout dollars and thereby inflating the economy and reducing all our savings and earnings.

And he's always been able to talk the talk.

This usually-non-fan of Obama

This usually-non-fan of Obama is slightly amazed: he actually called for indexing the minimum wage! For year after year both parties have conspired to NOT index it. The Dems always want to take credit for upping it a bit - or anyhow for trying - and the Gops always want to take credit for once again resisting an allegedly job-killing change.

Great points by everyone!

Great points by everyone! Henry Ford set the example (despite the anger of his fellow executives) by raising the pay of his workers substantially - and pointed out that the workers need to be able to afford to buy the products they produce. Wages have been held down for decades now, while corporate profits and CEO/Executive salaries have skyrocketed.

From a CNN Money article in August, 2005 - “…Had the minimum wage risen as fast as CEO compensation since 1990, the researchers calculated, it would now be $23.03 an hour instead of just $5.15. And the average production worker would be making $110,126 a year instead of $27,460….” Certainly, the numbers would be much higher now, 7 years later.

Would there have been higher inflation? Sure...but as a person who has run and owned several businesses in my life, I can attest to the fact that most businesses have labor costs of 20% - 25% and virtually none have labor costs exceeding 35%. If all hourly wages (except for CEO and Executive pay) were raised 100% tomorrow, the maximum increase in product sales prices to cover it would be 35%...and likely much lower.

That means workers would get a 100% increase in pay, while their costs would only go up 20 – 35%, leaving plenty of additional income to cover their increased costs. There would be additional taxes for them to pay, of course, which they could afford and still have significantly more money left for discretionary spending – while the increased taxes would help balance the budget and pay down the deficit while supporting badly needed programs that are currently being cut because of the self-inflicted budget “crisis”. As a bonus, it would eliminate the “housing crisis” as people could afford to stay in their homes and housing prices would appreciate, giving the middle class homeowner some equity again.

The best possible thing that could happen to this country would be a significant increase in the minimum wage…probably to something in the range of $20-25 an hour. The increased discretionary income for so many people would create immense demand for products and services, which would bring down unemployment, increase both State and Federal tax revenues (which would bring down the deficit while providing funds to pay off the debt and fund social programs instead of cutting them constantly), provide large amounts of revenue to Social Security and Medicare (allowing for adequate cost of living increases to the recipients instead of cuts) and end the current housing crisis by providing adequate income for most people to avoid losing their homes in foreclosure. It would also improve the housing conditions of millions of Americans as well as their health care options. It would even help the wealthy, since the increased demand and product sales would increase their revenues as well.

The real question is - why are the "best and brightest" minds in the country unable to see the obvious?

(Forty hours a week) X (50

(Forty hours a week) X (50 weeks) X $9 = $18,000

That's still more than $5,000 below the poverty line for a family with 2 children.

$12 per hour would be more realistic.

But I guess we working class Americans should be satisfied if we just get a few more crumbs from the tables of the parasitic elites we support.

$ 9 dollars an hour, that's a

$ 9 dollars an hour, that's a bit more than $15K a year, for a 40 hours week. Close to $16K a year for 44 hours a week. Minimum wage should be at least $20K a year for a 40-hours week. AND maximum income should be $ 1 million a year, which is 50 times $ 20K. That's more than enough. And more importantly, maximum wealth should not exceed $ 50 million. Again 50 times the maximum annual income, which is plenty. The billionaires and 'serious' multimillionaires must disappear as a group. That's a prerequisite for: 1. To reduce Inequality to an acceptable level; 2. To reduce the federal deficit; 3. To stimulate the economy, and create jobs - building infrastructure, launching a green economy; 4. to improve significantly the quality of public education; 4. to maintain social security... Pentagon's budget should be cut into half, that would help too...

Chetdude, I agree! Actually,

Chetdude, I agree!
Actually, I came here to post: back in 1968 (before Nixon repudiated the Bretton Woods system and the gold-for-dollars exchange), a gallon of regular gasoline (plus "free" lead, to boot) cost 29.9; round to .30 cents a gallon. Minimum wage was $1.65.
Figure: the ratio of the price of a gallon of gas to wages was (rounded again) 1:5.
So, if a gallon of gas today is $4, figure that minumum wage (an authentic living wage) should be roughly $20.00 per hour.
Talk about the Obama adminstration and its economic flacks short-changing the typical minimum wage-earner...
I've always believed that a touch of irony lurks in a civilization where the minimum wage (and benefits) are determined by a select group of people who set their own salaries and don't live on the minimum wage...
Note: today the price of Gold is $1650.00 per oz. If the minimum wage is set @ 9.00, the typical individual would have to work 183 hours to trade for an ounce of gold. Back in 1968, after 21 hours of minimum wage, one could buy that same ounce of gold...
The working stiff, in our tragically over-populated world, who only possesses his skills and time, to trade, has been reduced to what? Slavery? The blessings of the monetarist system, I suppose.

If we had a reasonable,

If we had a reasonable, living MAXIMUM wage we could afford Nixon's Guaranteed Annual Wage and Universal Health Care...

Ah, that damn Socialist Nixon....

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