Citing that a hike “isn’t just a good deed…it’s good for business and good for our economy,” the president maintained that he couldn’t achieve this plank on his income equality agenda without support from the public to pressure Congress “to give America a raise.”
Over the past few weeks, he has sought to build momentum for this cause, recruiting allies in the face of unyielding opposition from congressional Republicans. He’s trying to enlist CEOs of major corporations to increase low-income workers’ paychecks, using Costco Wholesale and The Gap, which recently raised minimum pay for 65,000 US employees, as poster companies. Last Friday, he targeted Democratic governors as wage-hike ambassadors, citing that Neil Abercrombie of Hawaii, Jay Inslee of Washington, Dannel Malloy of Connecticut, Martin O’Malley of Maryland, Deval Patrick of Massachusetts and Pat Quinn of Illinois as those who have “all focused on this in their State of the State addresses.”
Of course, this matter represents a major thrust of civil rights leaders – several of whom Obama met last week – since the Bureau of labor Statistics reports that 5.3% of all African American workers earn hourly wages at or below the current federal minimum wage.
This battle also serves as a major test for Obama’s “year of action,” a bold mandate to drive initiatives through executive action when he can’t get Congress to budge. Making good on his State of the Union vow, our nation’s chief executive signed an executive order on Feb. 12 requiring contractors and subcontractors to boost the minimum wage of their workers to $10.10 effective January 1, 2015. The higher wage will apply to new contracts and replacements for expiring agreements.
Although the president can direct federal contractors to hike wages, he’s unable to force private enterprise to comply with this policy without congressional authorization. For now, he seeks to use his executive order in the same manner as other presidents like LBJ who issued his mandate 49 years ago to end discriminatory practices among government contractors or even Richard Nixon’s 1969 directive for the Commerce Dept.’s coordination of federal programs to strengthen minority business: To carve a clear path for American industry to follow.
Congress begins debate next month on Obama-backed legislation introduced by Sen. Tom Harkin (D-Iowa) to increase the current $7.25 an hour federal wage in three increments to $10.10 by 2016. After reaching that level, the bill calls for minimum pay to be adjusted annually for inflation.
Both Democrats and Republicans sought to use last week’s report from the nonpartisan Congressional Budget Office to their rhetorical advantage. The Democrats fared much better in making their argument about the benefits of a higher wage. The CBO revealed 16.5 million low-wage workers earning $7.25 an hour and another 8 million making slightly more than the minimum would see larger paychecks – a collective increase of $31 billion that would augment consumer spending and, in turn, expand our economy. Moreover, the report found that 900,000 people would be lifted out of poverty by 2016. The White House and Democrats embraced these stats, adding that the hike would not result in any new taxes or government spending.
The GOP, however, pounced on findings that an increase would eliminate some 500,000 jobs – just 0.3% of overall employment. “While helping some, mandating higher wages has real costs, including fewer people working,” spokesman for House Speaker John Boehner (R-Ohio) told reporters last week. “With unemployment Americans’ top concern, our focus should be creating — not destroying — jobs for those who need them most.”
Senate Minority Leader Mitch McConnell (R-KY) advocated scrapping the Harkin bill, asserting on Fox News Sunday in late January: “Isn’t it reasonable that somebody who’s working full time, 40 hours a week, should be able to live above the poverty line?…The minimum wage is mostly an entry-level wage for young people.”
According to the CBO, McConnell’s analysis doesn’t hold water: Only 12% of teenagers would be affected. Roughly half of such increases would go to families making $35,000 while middle-income families in which a spouse works a part-time gig would prove to be prime beneficiaries. Women represent 56% of these impacted workers.
CBO estimates reveal that 45 million Americans will live below the poverty line by 2016 if a wage bump is not enacted. According to the Department of Health and Human Services, the poverty threshold for a family of four in 48 states and the District of Columbia stands at an income level of $23,550. The U.S. Census Bureau found that African-Americans suffer from a poverty rate of 27.2% —the highest of any group—versus 25.6% of Latinos, 11.7 % for Asians and 9.7% for whites.
“What must be weighed in any analysis, CBO and others, is that blacks suffer disproportionately from having to do work and not get the kind of wages that we need,” says Rev. Al Sharpton, president of National Action Network. “This is a central concern in our community. It’s not just having a job; but having wages that are guaranteed to provide for our families. We had full employment in the black community during slavery. We just didn’t have wages. So we don’t want just a job, we want a job that pays, and pays so that we can take care of our families.”
As the president presses forward on his income equality crusade, the minimum wage debate promises to be a wedge issue as midterm races heat up in the coming months. So he, too, will continue to stay in campaign mode to galvanize CEOs, small business owners, state officials, activist groups and everyday citizens, communicating why they need to engage in this fight and bring others into the fold. Thus far, he has much of the public on his side: According a recent Pew Research Center poll, 73% of Americans support the wage hike with roughly half of the Republicans polled favoring the proposal.
Although the issue stirred fierce debate between Democrats and the GOP at the National Governors Association convening in Washington this week, there are at least 14 states considering wage bumps. If Republican governors refuse to endorse such initiatives then Team Obama will seek out advocates – including civic leaders and ministers – and encourage social media networks to help sway the local electorate. In fact, the president points to New Jersey as an example of a state in which Republican Gov. Chris Christie vetoed such legislation only to have it overturned when about 60% of voters approved a wage increase in a ballot initiative last November.
Obama’s ability to win the minimum wage battle will depend on a consistent, powerful message to win greater public and business support as well as mobilized troops that will flood local and national representatives with calls, emails and tweets.
That’s what it will take to win his campaign – especially in an election year.
I would like to hear your views on how a minimum wage hike would affect your business or financial status as BLACK ENTERPRISE continues to cover this issue, please share your views in the comments section below or reach out to me on my Twitter account: @DTDingle.