NYT: Obama’s Call to Raise Minimum Wage Is Big Political Risk

Wednesday, 13 Feb 2013 11:37 AM

By Glenn J. Kalinoski

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President Barack Obama’s call on Congress to raise the federal minimum wage during his State of the Union address is a proposal that would face opposition from companies employing low-wage workers.

Conservatives have often said that increasing the minimum wage produces a burden for job creators, especially when the economy is sluggish, according to The New York Times.

House Speaker John Boehner voted against a 2006 bill pushing the minimum wage to its current $7.25 per hour from $5.15. The legislation passed in 2007, though many Republicans voted against it. Obama wants the level raised to $9 in stages by the end of 2015 with a provision adjusting it for inflation.

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The Times also reported that some economists, including David Neumark of the University of California, Irvine, have argued that minimum wages are “counterproductive at reducing poverty.”

The White House said the move would have positive effects for low-income families without unduly burdening businesses or raising the unemployment rate.

“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,” Obama said.

The White House said the $1.75 increase in the minimum wage would be enough to offset roughly 10 percent to 20 percent of the increase in income inequality since 1980.

Many state and local governments set their minimum wages above the federal level. Washington is the only state that sets a minimum wage above $9 per hour and several states exceed the current $7.25.

New Jersey Gov. Chris Christie rejected a bill to raise the state's minimum wage by more than $1, setting up a confrontation that could lead to Democrats taking the measure to voters in November.

In issuing a conditional veto of the Democratic-sponsored measure, Christie countered with his own proposal to phase in the increase from $7.25 per hour to $8.50 over three years, according to the Newark Star-Ledger. But his counter offer did not include an annual automatic cost-of-living adjustment tied to inflation, a provision that was included in the Democratic bill.

"The sudden, significant minimum wage increase in this bill, coupled with automatic raises each year tied to the Unites States Consumer Price Index, will jeopardize the economic recovery we all seek," Christie said in a message to the Democrat-controlled legislature last month.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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