In SOTU, Obama calls for higher wages and better leave policies

In last night's State of the Union speech, President Obama addressed several ways to "make sure our economy honors the dignity of work, and hard work pays off for every single American." Here's what he said about wage increases:

To every mayor, governor, state legislator in America, I say, you don't have to wait for Congress to act; Americans will support you if you take this on. And as a chief executive, I intend to lead by example. Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover. We should too. In the coming weeks 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.

Of course, to reach millions more, Congress does need to get on board. Today the federal minimum wage is worth about twenty percent less than it was when Ronald Reagan first stood here. And Tom Harkin and George Miller have a bill to fix that by lifting the minimum wage to $10.10. It's easy to remember: 10.10. This will help families. It will give businesses customers with more money to spend. It does not involve any new bureaucratic program. So join the rest of the country. Say yes. Give America a raise. Give 'em a raise.

As Kim Krisberg reported here last week, several states and the District of Columbia have recently passed bills raising their minimum wages, and advocates are campaigning for increases in several other states. Wonkblog's Brad Plumer has the details on Obama's proposal to raise wages for federal-contract workers and its likely impact; he notes that it will only affect future contracts, not existing ones, so workers won't see an immediate pay increase. By some estimates, he writes, around 200,000 contracted workers could eventually benefit.

Also on the topic of low pay, Obama noted that women still get paid only 77% of what men do, and stated, "Women deserve equal pay for equal work." He then highlighted the ways inadequate medical- and family-leave policies harm women workers:

You know, she deserves to have a baby without sacrificing her job. A mother deserves a day off to care for a sick child or sick parent without running into hardship. And you know what, a father does too. It is time to do away with workplace policies that belong in a "Mad Men" episode. This year let's all come together, Congress, the White House, businesses from Wall Street to Main Street, to give every woman the opportunity she deserves, because I believe when women succeed, America succeeds.

On sick and family leave, too, local and state governments have not waited for Congress to address the problem. Just this week, Newark, New Jersey's City Council approved a paid-sick-leave ordinance. Connecticut, San Francisco, the District of Columbia, Seattle, Portland, New York City, and Jersey City have all passed laws requiring employers to let workers earn paid sick leave. Several statewide campaigns for paid sick days are also underway.

Paid sick days, as well as longer-term leave for medical conditions requiring more than a couple of days off work, aren't just good for the individual workers who might otherwise have to choose between healthy recuperation and pay. They're also good for public health. When people are able to stay home from work to recover from an illness, or to care for a child who might otherwise be sent to school or day care while sick, the rest of us have a lower risk of catching diseases from them. At its most recent annual meeting, the American Public Health Association adopted a policy statement urging Congressional action -- or, in its absence, state and local action -- to expand US workers' access to paid sick days and paid medical and family leave.

Congress could certainly take action to address inadequate leave policies. Senator Tom Harkin and Representative Rosa DeLauro reintroduced the Healthy Families Act, which would allow workers to earn paid sick leave. Last month, Senator Kirsten Gillibrand and Representative Rosa DeLauro introduced the Family and Medical Leave Insurance Act, or FAMILY Act, which would alleviate some of the difficulties workers face in addressing their own or a loved one's health problem. The FAMILY Act would create a social insurance system akin to those operating in California and New Jersey (and soon to be operating in Rhode Island). With funds from a small payroll tax ($1.50 per week from the average worker), it would replace up to two-thirds of a worker's pay when she or he needs to take time off to deal with a serious health condition, bond with a new child, or care for a family member with a serious medical problem. Workers would be able to take up to 12 weeks of partially paid leave a year.

If Congress doesn't act on these minimum-wage and paid-leave bills, I expect we'll keep seeing more cities and states pass their own legislation to address these issues. I've been delighted to see my own city of Washington, DC raise our minimum wage and require employers to offer paid sick days. Seeing such laws implemented on a smaller scale can demonstrate feasibility to national lawmakers; for instance, California's successful social insurance system for paid medical and family leave bolsters the case for passing the FAMILY Act.

At some point, though, it only makes sense for Congress to act, instead of waiting for each state to design its own slightly different system to assure that low-wage workers can earn a decent living and take time off when they're sick. National action on the minimum wage and on paid sick, medical, and family leave would help us achieve the dream President Obama gave voice to in his address: building a country in which "opportunity for all lets us go as far as our dreams and toil will take us."


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There is one problem with this "solution". ...

If you raise someone making $7.25 per hour to $10.10 per hour and DO NOT raise a person making $11.50 per hour, the get dragged down. So essentially you are not raising people up, you are dragging everyone else down. Trickle up poverty is not the answer. This is exactly what happens, not to mention layoffs since companies look for ways to get rid of people to make up for the higher cost production.

Go ahead and raise it to $10.10 but when you pay $75 for a happy meal, don't come crying to me abut it.

How is someone making $11.50 an hour hurt by a co-worker getting a raise from $7.25 to $10.10?

A review of the economic literature has found little or no changes in employment in response to minimum-wage increases, and states with higher wages haven't seen skyrocketing prices for consumer goods.

How are they hurt? You bring their value DOWN. They are no longer worth what they were. So, if you give the minimum wage earners a $3.00 raise, it is only fair that everyone else gets a $3.00 raise too.

Simply put. You give them a raise and don't give me one, you can kiss your number one salesman goodbye and get one of your uneducated 10.10 earners to sell for you. Let me know how that works out.

Raising the minimum wage in no way "devalues" the labor of someone who was previously making a higher wage. Instead, it provides that worker with the opportunity to lobby their employer - preferably in concert with fellow workers - for a raise.

We all know that $11.50 (or $24,000 yr) is way too little to live comfortably, pay for transportation and health care, and save for the future.

And the minimum wage is much worse. Rather than worring about a 'fantasy' $75 Happy Meal, it would make more sense to recognize that poverty wages can't support an individual or their family, which requires that they tap into the government "safety net" paid for with taxes. Doesn't it make more sense to require employers to pay a living wage - which would be closer to $15/hr., rather than Obama's stingy proposal.

Of course $10.10 is easy to remember. You can also think of it as 10/10. Or October 10, the day the the Bolsheviks' Central Committee voted to start their revolution (a/k/a "Red October").

By Saber Walsh (not verified) on 12 Feb 2014 #permalink

35% of all the money being spent on new electronics goes to Europe. After WWII America gave all returning vets, which essentially meant all men, a free college education. We soared in innovation. Europeans followed our lead, continue to invest in their people, and they are reaping the benefits now and will, for the next generation.…

If the minimum wage is raised to $10.10 an hour there wouldn't be a divider put between the lower levels of the income pyramid. People base there opinions of themselves on the amount an hour they make. Regardless of personal opinion it would indeed bring the ones who make 11.50 an hour to a lower amount of value. But its still more then 10.10 an hour. More then minimum wage. Isn't that better then mimum wage being raised to $11.50 ?

By missy leger (not verified) on 31 Mar 2014 #permalink