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Obama Meets With Democratic Governors To Push Federal, State Minimum Wage Hikes

Monday, February 24, 2014
By Chris Opfer

Feb. 21 --In a Feb. 21 meeting with Democratic governors, President Barack Obama renewed his call for federal lawmakers to increase the minimum wage, while also discussing efforts to raise the wage floor for workers at the state level.

“Today we did bring Democratic governors to the White House to spend some time talking about a couple of issues that are of critical importance to our constituencies and, I think, to the country,” Obama said to reporters before a meeting with the Democratic Governors Association. “And one of those is the issue of minimum wage and what we can do to give America a raise.”

The Senate is expected to vote in early March on a measure (H.R. 1010, S. 1737) that would raise the federal minimum wage to $10.10 from $7.25 in three steps, ending in 2016. The legislation would also tie additional increases to inflation .

Meanwhile, Obama said a number of the governors attending the meeting--including Maryland Gov. Martin O'Malley, Illinois Gov. Pat Quinn, Massachusetts Gov. Deval Patrick, Washington Gov. Jay Inslee, Connecticut Gov. Dannel P. Malloy, and Hawaii Gov. Neil Abercrombie--are working to raise minimum wages in their individual states.

A total of 13 states increased their minimum wages effective Jan. 1, 2014, by increments of 10 cents to $1 per hour, raising the hourly pay rate for about 2.5 million workers . Several other states are expected to vote on wage hike legislation this year.

'Smart Business,' Good Politics?
The president also noted that some businesses in traditionally low-paying industries have voluntarily chosen to raise the minimum wages they pay their workers.

On Feb. 19, Gap Inc. announced that it plans to increase hourly pay for roughly 65,000 workers to $10 an hour by June 2015 .

“[I]ncreasingly, businesses recognize that raising wages for their employees is a smart business issue because they end up having lower turnover rates, higher productivity, higher morale, folks stay longer and are more focused on the job rather than having to worry about whether or not they can pay their bills at the end of the month,” Obama said.

Opponents of the wage hike legislation argue that it will swell payroll costs and force employers to cut jobs or reduce hours.

The Congressional Budget Office concluded in a report issued Feb. 18 that a $10.10 wage increase would likely cost about 500,000 workers their positions . The CBO also determined that the wage increase would boost earnings for most of the country's 16.5 million low-wage workers and increase overall real income by about $2 million.

But Obama said during his remarks at the White House that increasing the minimum wage also makes political sense because voters generally support the effort. He referred in particular to a New Jersey ballot measure approved in November 2013 that boosted the state's hourly minimum wage to $8.25 from $7.25 effective Jan. 1 and indexed additional increases to inflation . Roughly 61 percent of voters favored the wage hike, which Gov. Chris Christie (R) had previously vetoed.

“I'm going to be seeking Republicans who are game to work with us and prepared to work with us on this issue,” Obama told reporters. “As I said at the State of the Union, it's not something that requires a big bureaucracy and it doesn't require a lot of federal spending. All it requires is for us to stake out a claim on behalf of American workers that's consistent with our values as a nation.”

 

To contact the reporter on this story: Chris Opfer in Washington at copfer@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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