In his State of the Union address Tuesday, President Barack Obama took the time to call for increasing the minimum wage, reducing the income gap and stimulating economic recovery. While the speech covered many topics, including health care and the war in Afghanistan, it’s telling that more than five years after the financial crisis, the economy remains top of mind.
Peter Baker wrote for the New York Times that Obama “declared independence from Congress”:
But the main thrust of Mr. Obama’s message was the wide gap between the wealthiest and the rest of America, and he used the speech to position himself as a champion of those left behind in the modern economy. “Those at the top have never done better,” he said. “But average wages have barely budged. Inequality has deepened. Upward mobility has stalled.
“The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by, let alone to get ahead,” he added. “And too many still aren’t working at all. So our job is to reverse these trends.”
To do so, the president announced an executive order raising the minimum wage to $10.10 an hour for future federal contract workers and the creation of a new Treasury bond for workers without access to traditional retirement options. He proposed incentives for trucks running on alternative fuels and higher efficiency standards for those running on gasoline. And he announced a meeting on working families and a review of federal job training programs.
Mr. Obama was gambling that a series of ideas that seemed small-bore on their own would add up to a larger collective vision of an America with expanded opportunity. But the moderate ambitions were a stark contrast to past years when Mr. Obama proposed sweeping legislation to remake the nation’s health care system, regulate Wall Street, curb climate change and restrict access to high-powered firearms.
The top of the Wall Street Journal story by Carol E. Lee and Peter Nicholas also focused on Obama’s declaration to bypass Congress whenever possible:
President Barack Obama, seeking to restore confidence in his leadership, declared in his State of the Union address Tuesday that he would use executive power to try to narrow the gap between rich and poor and speed the nation’s economic recovery.
Mr. Obama’s speech was essentially a manifesto designed to inject new vigor into his languishing agenda and guide his presidency through the partisan divide in the capital. The goal was to position the president as the champion of struggling Americans fed up with the bickering in Washington, marshaling an array of policy proposals aimed at helping them save more, earn more and find work in a tough economy.
“Corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged,” Mr. Obama said. “Inequality has deepened. Upward mobility has stalled…Our job is to reverse these trends.”
The president told the joint session of Congress that “I’m eager to work with all of you,” but his message was clear: “Wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”
A USA Today analysis by Susan Page said the president’s speech reflected a “political journey from the aspirational to the achievable”:
This time, the president announced a pledge by some top corporate CEOs not to discriminate against job seekers who have been out of work for a long time and unveiled an executive order raising the minimum wage for new federal contract workers. “Give America a raise,” he said, urging Congress to raise the base wage for everyone.
He called reducing economic inequality and restoring upward mobility “the defining project of our generation.” He repeated the word “opportunity” a dozen times. He spoke energetically and more quickly than he typically does in big speeches.
But on that same platform in 2013, his proposals were more sweeping and his threat of political leverage more muscular. “Now is the time to do it; now is the time to get it done,” he said then of overhauling immigration laws. On offering quality preschool to every child in America: “That’s something we should be able to do.” On raising the minimum wage: “We should be able to get that done.” On simplifying the tax code: “We can get this done.”
Politico’s Josh Gerstein and Darren Samuelsohn wrote a piece fact-checking some of the president’s statements, including who would benefit from a minimum wage increase:
Who benefits from minimum wage boost?
Obama: “I will issue an executive order requiring federal contractors to pay their federally funded employees a fair wage of at least $10.10 an hour — because if you cook our troops’ meals or wash their dishes, you should not have to live in poverty.”
Obama’s move-part of his challenge to Congress to boost the minimum wage for most workers to $10.10 — clearly fits with his drive to act where he can and press lawmakers to do more. But his ability to act unilaterally on this point is very limited as most employees of federal contractors make well over $10 an hour.
White House officials say a few hundred thousand employees could get a wage boost from the president’s action. But it would apply only to future contracts, so would likely take several years to have even that impact.
Across the U.S., according to the Labor Department, 3.6 million workers currently make minimum wage or below. And millions who make a little more would get a boost if the wage went up to $10.10 — though some might lose their jobs or hours if employers respond to the higher wage costs by trying to use less labor.
I’m looking for coverage in the next few days about this topic. Will business leaders respond by raising wages and hiring fewer people, which would seem to widen the gap between the haves and the have nots even further. The analysis of this and how it will fit into an overall agenda of economic recovery will be an interesting one.