Obama minimum wage pledge divides opinion
By Jeremy Tordjman ,AFPWASHINGTON -- U.S. President Barack Obama's pledge to raise the minimum wage by 24 percent has divided economists and businesses who warn it could threaten recent improvements in jobless numbers.
March 11, 2013, 12:10 am TWN
Obama has stated that his administration plans to increase the existing minimum hourly rate from US$7.25 to US$9, vowing to press ahead with the initiative despite the sequester budget crisis.
“There are other areas where we can still make progress even with the sequester unresolved,” Obama said, referring to US$85 billion of drastic budget cuts that went into effect on March 1.
“I'm going to keep pushing to make sure that we raise the minimum wage so that it is one American families can live on.”
Unlike other developed nations such as France, where the minimum wage is indexed to inflation and adjusted automatically each year, the rate in the United States often remains unchanged for years at a time.
The last increase, to the current level of US$7.25 an hour, was introduced nearly four years ago in July 2009.
“Taking action on the minimum wage is long overdue,” U.S. Deputy Labor Secretary Seth Harris told AFP.
The United States has one of the lowest minimum wages of major industrial nations.
According to figures from the International Labor Organization, the U.S. is only 38 percent of the median wage, compared with 46 percent in Britain and 60 percent in France.
For Democratic lawmakers, Obama's proposals do not go far enough. Democrats in Congress have launched a bill hoping to raise the rate to US$10.10.
Democratic House Minority Leader Nancy Pelosi said the increase — strongly opposed by Republicans — was necessary to protect middle class Americans.
“We have a situation where if we are to honor our commitment to the middle class, which is the backbone of our democracy, we have to reflect that in ... our public policy,” Pelosi said.
Proposals to increase the minimum wage are broadly popular, with 71 percent of people backing the move, according to a Gallup poll.
Former Obama administration adviser William Spriggs, the chief economist of the American Federation of Labor and Congress of Industrial Organizations, said the hike was essential.
“The gap between the average wage of the American worker and the minimum wage is very high,” Spriggs said.
He said the current minimum wage also exposed a gender divide in the workforce, noting that those on the minimum wage were predominantly women.
“We think it would also help close the gender gap between men and women in terms of salary,” he said.