Analysis: Minimum wage plan a new test for Obama - KSFY News - Sioux Falls, SD News, Weather, Sports

Analysis: Minimum wage plan a new test for Obama

Posted: Updated:
(AP Photo/Charles Dharapak, Pool). President Barack Obama is greeted before his State of the Union address during a joint session of Congress on Capitol Hill in Washington, Tuesday Feb. 12, 2013. (AP Photo/Charles Dharapak, Pool). President Barack Obama is greeted before his State of the Union address during a joint session of Congress on Capitol Hill in Washington, Tuesday Feb. 12, 2013.

By JIM KUHNHENN

Associated Press

WASHINGTON (AP) - If anything illustrated President Barack Obama's new sense of self-confidence, it was his State of the Union call for an increase in the national minimum wage.

For much of the past two years, the president and his aides have worked to shed an image that he was anti-business, to bury his once-upon-a-time dismissal of bankers as "fat cats," to invite corporate and entrepreneurial voices into the White House.

The result was that one of the cogs of the Democratic Party, the organized labor movement, felt left adrift by the president.

No more.

In a move that cheered union leaders and rankled the business community, the president proposed raising the hourly minimum wage from $7.25 to $9 by the end of 2015 and linking future increases to inflation. The current rate has been in place since 2009.

"Working folks shouldn't have to wait year after year for the minimum wage to go up while CEO pay has never been higher," Obama said Tuesday as Democrats rose from their seats while most Republicans sat stone-faced.

Whether Obama can win in a divided Congress, where Republicans control the House and Democrats the Senate, remains to be seen. But the president's calculation is clear: If there was a time to deliver on a 2008 campaign promise it is now. And if there was an issue where labor would have his back, this would be it.

"Working people have had their workloads dramatically increased during the economic crisis, while their pay has fallen," Damon Silvers, the director of policy and special counsel at the AFL-CIO, said Tuesday night. "The president spoke tonight about raising wages as a goal of our nation's economic policy - and the labor movement will mobilize behind that goal."

To be sure, the president's proposal is more modest than it was in 2008, when he called for a $9.50 minimum hourly wage by 2011.

And while he cast the issue as one of economic fairness, he also made the economic argument that higher wages would mean more customers for businesses. He reminded his audience that even his 2012 rival Mitt Romney had at one point supported automatic cost-of-living increases to the minimum wage, though Romney later modified his stance.

The issue of economic inequality - its severity a matter of debate between liberals and conservatives - has long preoccupied Obama. In his first term, however, the recession required his immediate attention. And while his health care law was one attempt at addressing those disparities, the Republican gains of the 2010 midterm elections chastened him and his focus shifted to a debate with Congress over fiscal restraint.

But his economic aides continued to cite growing wage gaps between rich and poor as a vexing issue. A 2011 study by the Congressional Budget Office found that from 1979 to 2007, the wealthiest 1 percent of the population saw their after-tax income grow by 275 percent. For the same period, the 60 percent of the population considered middle-income saw their after-tax income grow just shy of 40 percent.

"We gather here knowing that there are millions of Americans whose hard work and dedication have not yet been rewarded," Obama said Tuesday. "Our economy is adding jobs - but too many people still can't find full-time employment. Corporate profits have rocketed to all-time highs - but for more than a decade, wages and incomes have barely budged."

The issue has the kind of populist appeal that Obama can take directly to the public. White House aides believe that after Obama's solid re-election, Republicans are on their heels and are vulnerable to public pressure. If Republicans stand fast against an increase in the minimum wage, Democrats will be sure to use it against them during next year's midterm election campaigns.

Obama's attempts to cultivate business leaders and corporate executives could help forge a compromise. Past increases in the minimum wage have come with tax sweeteners and other benefits for the private sector, particularly small businesses. A wage hike could also become part of negotiations over corporate tax rates, which Obama is willing to overhaul if they increase revenue. Republicans could fight back, saying they might settle for one or the other, but not both.

For now, Republicans aren't ceding on either.

"Republicans are going to close the loopholes but we're going to do it to lower tax rates for all Americans," Said Rep. Kevin Brady, R-Texas, a senior member of the tax-writing House Ways and Means Committee.

He added: "Our goal shouldn't be to raise the minimum wage. It should be to get people off it."

Daniel S. Hamermesh, an economics professor at the University of Texas at Austin, agrees - to a point.

"Raising the minimum wage will kill off a few jobs and is a slightly harmful idea. Not a disaster, and some people will benefit. But it is a job-killing bill. There are better things to do," he said. "On the other hand, the proposal to tie the minimum wage to the cost of living is nearly excellent."

He said that if the increases were linked to average wage hikes instead of the cost of living, that could even make an initial increase to $9 an hour worthwhile.

___

Jim Kuhnhenn covers the White House and economics and politics for the Associated Press. Follow him on Twitter: http://twitter.com/jkuhnhenn

An AP News Analysis

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Government Surplus program provides armored trucks for officers in Mitchell, Watertown

    Government Surplus program provides armored trucks for officers in Mitchell, Watertown

    Government Surplus program provides armored trucks for officers in Mitchell, Watertown

    Friday, April 25 2014 12:21 AM EDT2014-04-25 04:21:48 GMT
    Mitchell police train on armored truck on loan from federal surplus programMore >>
    Mitchell police train on armored truck on loan from federal surplus programMore >>
  • Mountain lion tranquilized in Spearfish tree

    Mountain lion tranquilized in Spearfish tree

    Mountain lion tranquilized in Spearfish tree

    Thursday, April 24 2014 11:48 PM EDT2014-04-25 03:48:35 GMT
    SPEARFISH, S.D. (AP) A wildlife official says a mountain lion that was found in a tree at a Spearfish home was tranquilized and later released a few miles away in a rural area. South Dakota Game, Fish Parks Game Warden Mike Apland says that a Spearfish couple enjoying an early morning cup of coffee on their deck Wednesday noticed the cougar in the tree and called authorities. Apland says a dog likely had chased the young male mountain lion up the pine tree.He says wildlife officials ...More >>
    SPEARFISH, S.D. (AP) A wildlife official says a mountain lion that was found in a tree at a Spearfish home was tranquilized and later released a few miles away in a rural area. South Dakota Game, Fish Parks Game Warden Mike Apland says that a Spearfish couple enjoying an early morning cup of coffee on their deck Wednesday noticed the cougar in the tree and called authorities. Apland says a dog likely had chased the young male mountain lion up the pine tree.He says wildlife officials ...More >>
  • Second Bomb Threat in One Day

    Bomb Threat in Sioux Falls

    Bomb Threat in Sioux Falls

    Friday, April 25 2014 12:57 AM EDT2014-04-25 04:57:08 GMT
    Sioux Falls Police were called to Walmart on south Louise avenue early Thursday evening, April 24th. Store management evacuated the building prior to the polices arrival. Sioux Falls Fire and Rescue and Rural Metro Ambulance arrived to stand by. A search of the building was conducted by officers and staff and no suspicious devices were found. Business resumed as usual after the search was complete and no threats were found.The investigation into this threat, and also a bomb threat that was ca...More >>
    Sioux Falls Police were called to Walmart on south Louise avenue early Thursday evening, April 24th. Store management evacuated the building prior to the polices arrival. Sioux Falls Fire and Rescue and Rural Metro Ambulance arrived to stand by. A search of the building was conducted by officers and staff and no suspicious devices were found. Business resumed as usual after the search was complete and no threats were found.The investigation into this threat, and also a bomb threat that was ca...More >>
  • A closer look at the future of unmanned aircraft

    A closer look at the future of unmanned aircraft

    Thursday, April 24 2014 10:40 PM EDT2014-04-25 02:40:03 GMT
    It cuts through the air in a matter of seconds. The hum of the rotors akin to a growing swarm, but this drone doesn't sting. Instead it gives pilot Adam Jungemann the opportunity to see the world like never before. "It's a chance to kind of cut loose and just fly and just be able to see everything! See things from a birds eye view, it's just totally different and it's a very freeing kind of feeling that way." Said Jungemann.As a videographer, Adam uses the DJI Phantom drone to give the AJ Pro...More >>
    It cuts through the air in a matter of seconds. The hum of the rotors akin to a growing swarm, but this drone doesn't sting. Instead it gives pilot Adam Jungemann the opportunity to see the world like never before. "It's a chance to kind of cut loose and just fly and just be able to see everything! See things from a birds eye view, it's just totally different and it's a very freeing kind of feeling that way." Said Jungemann.As a videographer, Adam uses the DJI Phantom drone to give the AJ Pro...More >>
  • Family happy everyone is OK after car crashes into house

    Family happy everyone is OK after car crashes into house

    Family happy everyone is OK after car crashes into house

    Thursday, April 24 2014 10:18 PM EDT2014-04-25 02:18:42 GMT
    A driver lost control and came crashing through the garage into his own home.More >>
    A driver lost control and came crashing through the garage into his own home.More >>
  • Agencies urge Governor Daugaard to expand Medicaid

    Agencies urge Governor Daugaard to expand Medicaid

    Thursday, April 24 2014 10:13 PM EDT2014-04-25 02:13:59 GMT
    Community health professionals and providers are urging Governor Dennis Daugaard to expand Medicaid under the Affordable Care Act.Despite the state legislative session being over, the Governor has the authority to expand Medicaid. Thursday's gathering at the Salvation Army in Sioux Falls was in part to inform people that Medicaid expansion is still possible. Rosti Voznyuk and his wife don't qualify for Medicaid right now, and he tells KSFY he can't afford the insurance provided by his employe...More >>
    Community health professionals and providers are urging Governor Dennis Daugaard to expand Medicaid under the Affordable Care Act.Despite the state legislative session being over, the Governor has the authority to expand Medicaid. Thursday's gathering at the Salvation Army in Sioux Falls was in part to inform people that Medicaid expansion is still possible. Rosti Voznyuk and his wife don't qualify for Medicaid right now, and he tells KSFY he can't afford the insurance provided by his employe...More >>
  • Avera Medical Minute ASL: Meeting the need for Family Care Physicians

    Avera Medical Minute ASL: Meeting the need for Family Care Physicians

    Thursday, April 24 2014 10:00 PM EDT2014-04-25 02:00:12 GMT
    It's not always easy to attract new doctors to rural South Dakota. In Aberdeen, there's been a growing demand in the family practice field. At Avera St. Luke's hospital, they're meeting that need with exceptional talent. "Hi Mason! I'm Dr. Shawn, how are you my friend?" Asked Dr. Shawn Bartel, with Avera Aberdeen Family Physicians.The moment he walks in the door, you can tell Dr. Shawn Bartel loves what he does. As the newest face at the Avera State Street Medical Square, he's hit the ground ...More >>
    It's not always easy to attract new doctors to rural South Dakota. In Aberdeen, there's been a growing demand in the family practice field. At Avera St. Luke's hospital, they're meeting that need with exceptional talent. "Hi Mason! I'm Dr. Shawn, how are you my friend?" Asked Dr. Shawn Bartel, with Avera Aberdeen Family Physicians.The moment he walks in the door, you can tell Dr. Shawn Bartel loves what he does. As the newest face at the Avera State Street Medical Square, he's hit the ground ...More >>
  • Gravity coaster coming to Storybook Land

    Gravity coaster coming to Storybook Land

    Thursday, April 24 2014 8:18 PM EDT2014-04-25 00:18:49 GMT
    Storybook LandStorybook Land
    Storybook land is a place kids and parents can go to have a good time.“I come here with my dad and mom,” Joshua Chambers said. Chambers heads to the park often, and the Aberdeen Sertoma Club, and Parks and Recreation Department have some new ideas to bring a little more fun to the park“The first ride to be put in place will be the gravity coaster, it’ll be a really nice addition to the park,” Parks and Rec. Director Doug Johnson said. Right now storybook land has only a few rides, but what th...More >>
    Storybook land is a place kids and parents can go to have a good time.“I come here with my dad and mom,” Joshua Chambers said. Chambers heads to the park often, and the Aberdeen Sertoma Club, and Parks and Recreation Department have some new ideas to bring a little more fun to the park“The first ride to be put in place will be the gravity coaster, it’ll be a really nice addition to the park,” Parks and Rec. Director Doug Johnson said. Right now storybook land has only a few rides, but what th...More >>
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and KSFY. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service or our EEO Report.