Why the Minimum Wage Issue is a Win-Win for Obama
Posted in the Minneapolis Forum
#1 Aug 16, 2014
A new White House report touts progress toward increasing the minimum wage from the current $7.25 per hour to $10.10 per hour. The good news is that since President Obama proposed the increase in his 2014 State of the Union speech, 13 states plus the District of Columbia have increased their minimum wage. The minimum wage has also been raised locally in Seattle; Berkeley, Calif.; and Maryland’s Montgomery and Prince George’s Counties, among other places. Obama signed an executive order mandating that federal contractors pay $10.10 per hour. Local jurisdictions, including Philadelphia, Louisville, and Ypsilanti, Mich., have done the same for city workers and contractors.
The bad news is that the White House seems pretty unlikely to get a minimum wage bill through Congress this year, even in the Democratic-controlled Senate, where it’s been filibustered.
Or is that good news, too? The beauty of the minimum-wage issue — and what distinguishes it from just about everything else Obama is grappling with just now — is that the president wins either way.
If Obama gets the minimum-wage increase, he’ll improve the lives of low-wage workers (including many earning above the minimum wage, since raising it has the effect of boosting higher wages as well). The nonprofit Economic Policy Institute estimates that raising the minimum wage to $10.10 would increase wages, directly and indirectly, for about 28 million workers, and would boost GDP by $22 billion.
In theory raising the minimum wage ought to increase unemployment, but in practice, economists (including a few at the not-exactly-left-leaning Goldman Sachs) have lately struggled to find any real-world evidence of that happening. Job creation is actually faster in the states that have raised the minimum wage.
And if President Obama doesn’t get the increase? That will be a misfortune for those 28 million workers. But it will be an electoral boon for Obama and the Democrats come November, because (according to a recent CNN poll) 71% of all Americans favor increasing the minimum wage. Even among Republicans, a 54% majority favors increasing it. People who describe themselves as “conservative” favor it by 53%; “moderates” by 78%; and independents by 67%.(“Liberals” and Democrats, unsurprisingly, favor it by 88% and 90%, respectively.)
Republican opposition to a minimum-wage increase is a classic “wedge” issue, and Democrats could use one. Republicans are still projected by Five Thirty-Eight’s Nate Silver to take the Senate in November. The Democrats have little chance of retaking the House, and may even lose a few seats. And no one expects the GOP to lose control of a majority of the country’s state legislatures and governorships (some gains are likely in the former; some slippage in the latter).
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