About Barack Obama´s Plan to Raise the Minimum Wage in the USA – 1

In February 2013 Barack Obama´s administration made the proposal to raise the minimum wage from $7.25 to $9 per hour.

See for this Annie Lowrey´s article in the New York TimesRaising Minimum Wage Would Ease Income Gap but Carries Political Risks” (2/13/2013).

Anny Lowrey´s remarks reflect the usual polemics that arise when such a proposal of raising the minimum wage is made: “The White House said that the move would have profoundly positive effects for low-income families without unduly burdening businesses or raising the unemployment rate. It cited research showing “no detectable employment losses from the kind of minimum wage increases we have seen in the United States.” The White House also pointed to companies like Costco, the retail discount chain, and Stride Rite, a children’s shoe seller, that have previously supported increasing the minimum wage as a way to reduce employee turnover and improve workers’ productivity.       

But the move would almost certainly face stiff opposition. Many companies that hire low-wage workers — both small businesses and large businesses — have in the past vociferously opposed raising the minimum wage, as it increases their cost of business. By making employees more expensive for companies to hire, some economists argue that higher minimum wages increase the unemployment rate — a particularly toxic possibility given the high levels of joblessness that remain long after the recession has ended.       

Moreover, some economists, like David Neumark of the University of California, Irvine, have even argued that minimum wages are counterproductive at reducing poverty.       

On top of that, conservatives have often argued that higher minimum wages burden job creators, especially during times when the economy is weak. House Speaker John A. Boehner voted against a 2006 bill letting the minimum wage rise to its current level of $7.25 from $5.15. The legislation ultimately passed with bipartisan support in 2007, though many Republicans voted against it”.

In July 2013 Barack Obama was throwing his support behind congressional Democrats´ proposal to raise the minimum wage to $10.10.

See for this on the website of the Huffington Post the article: “Obama Gets Behind Democrats’ $10.10 Minimum Wage Proposal” (11/07/2013).

And in August of 2013 Barack Obama announced that he would support an increasing of the federal minimum wage to $10.10 per hour from its current $7.25.

See for this on the website of the Huffington Post the article: “Obama’s $10.10 Minimum Wage Would Fundamentally Change America” (11/08/2013).

The Council of Economic Advisers of the Executive Office of the President of the United States justified this move of raising the federal minimum wage from $7.25 to $10.10 in an article (including a presentation) on his website titled “The Economic Case for Raising the Minimum Wage” (2/12/2014).

This was on the same day (2/12/2014) when Barack Obama signed an executive order to raise the minimum wage for federal contractors.

See for this an article on the website of Reuters titled “Obama signs order to raise minimum wage for federal contractors” (12/2/2014).

If a government sets the minimum wage it is important to consider two aspects: The minimum wage should be set on a level a high enough to reduce considerably the poverty rate in a country. And low paid workers (often called “working poor“) live often under the poverty line though they are working full time.

For the current poverty threshold in the USA see the chart on the website of the National Poverty Center of the University of Michigan. See for this also the Wikipedia article “Poverty in the United States“.

On the other hand it is also important to avoid setting a minimum wage on such a high level that a considerable amount of jobs would be eliminated by this minimum wage.

As already mentioned, the current proposal of Barack Obama´s administration is to raise the minimum wage in the USA to $10.10 an hour.

Creative Commons Lizenzvertrag About Barack Obama´s Plan to Raise the Minimum Wage in the USA – 1 Klaus Gauger steht unter einer Creative Commons Namensnennung-NichtKommerziell-KeineBearbeitung 3.0 Unported Lizenz


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s