3:22 pm
Wed February 13, 2013

Obama's Call To Raise Minimum Wage Not Likely To Go Anywhere

Originally published on Wed February 13, 2013 7:44 pm





And I'm Robert Siegel.

Among the things President Obama proposed last night in his State of the Union Address, an increase in the minimum wage.

PRESIDENT BARACK OBAMA: Tonight, let's declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty...


OBAMA: ...and raise the minimum wage to $9 an hour.


SIEGEL: The president also said the wage should be indexed to inflation. Historically, business groups have opposed efforts to raise the minimum wage. And academics are divided over whether it helps or hurts job creation.

Here's NPR's Yuki Noguchi to tell how the idea is being received this time.

YUKI NOGUCHI, BYLINE: The response to the president's call to raise the minimum wage from 7.25 to $9 an hour fell into three basic camps: Good, bad and won't matter.

Christine Owens is executive director of the National Employment Law Project, an advocacy group working on behalf of the unemployed and low wage workers.

CHRISTINE OWENS: And we were just extremely pleased that he made it a cornerstone of how we value work and make sure that people who work for a living can make a living from work.

NOGUCHI: Owens says raising the minimum wage would benefit businesses because it tends to boost worker loyalty and productivity. She also echoes the president and the academic work he cited in his speech, arguing that the extra money will boost spending and growth, which in turn will spur more hiring.

OWENS: Businesses say that the number one reason they are not creating jobs is because there's a lack of demand. Well, as the wages of the people who are the lowest-paid people in our society go up, they spend every bit of what they earn.

NOGUCHI: Business groups tend to see it differently. They argue that businesses forced to pay higher wages won't be able to afford hiring as many people. In other words, they argue hiking the minimum wage hurts hiring.

Craig Shearman is spokesman for the National Retail Federation.

CRAIG SHEARMAN: We think a minimum wage hike right now would be just one more factor driving up costs for employers and making it harder for them to create jobs. That would be especially true for the small businesses that create most of the new jobs in our nation.

NOGUCHI: Shearman points out that employers already have a new health care law going into effect next year, which he says will cost them more. And higher costs, he worries, will mean fewer jobs.

SHEARMAN: We're concerned not about creating jobs just in the retail industry but creating jobs broadly. If people have a job, they are making money, they're coming into our stores, they're shopping and spending money with us. And if enough of them do that, we eventually have to hire more people. That's how retail jobs get created.

NOGUCHI: John Engler is former Republican governor of Michigan and president of the Business Roundtable, an organization that represents big companies' CEOs. His primary argument is that the minimum wage should not be the main issue.

JOHN ENGLER: It's almost all political.

NOGUCHI: Engler notes nearly all jobs in manufacturing and many other industries already pay more than minimum wage and raising it further will hurt new workers.

ENGLER: For teenagers, for unskilled workers, it does close doors. It's pretty clear that the economy is placing a value on people with training, with experience, and when you don't have that it's hard to get by making the cost of entry higher and higher and higher.

NOGUCHI: But he says, the biggest downside in the minimum wage debate is that it distracts focus from the more difficult tasks that businesses care about, like energy policy, tax reform and fiscal certainty.

ENGLER: Really, the goal ought to be maximum wages for everyone - let's have a growing, vibrant economy. I worry about the eight percent of people who don't have any wages - the ones that aren't working - and this really doesn't do anything for them either.

NOGUCHI: At any rate, the measure doesn't look likely to pass. Many prominent congressional Republicans have already opposed the president's plan.
