Posted on 07/30/2013 3:42:05 AM PDT by onyx
President Obama is changing gears on the economy, highlighting income inequality as a growing problem in advance of pitched fall battles with congressional Republicans over funding the government and raising the debt ceiling. [WATCH VIDEO]
The focus is intended to make it easier for Obama to argue that new taxes on the rich — and not cuts to social spending — should be imposed to lower the deficit.
It also dovetails with Obama’s call for Congress to raise the federal $7.25 minimum wage and to end the automatic spending cuts known as sequestration.
“This growing inequality is not just morally wrong, it’s bad economics,” Obama said in remarks last week in Galesburg, Ill., where he began a new push on the economy.
“The income of the top 1 percent nearly quadrupled from 1979-2007, but the typical family’s incomes barely budged,” he said.
The president reiterated that message in an interview with The New York Times last week.
“If we stand pat, if we don’t do anything … income inequality will continue to rise,” he told the newspaper. “Wages, incomes, savings rates for middle-class families will continue to be relatively flat. And that’s not a future that we should accept.”
Obama is also discussing the matter in private.
During a meeting earlier this month with members of the Congressional Black Caucus, Rep. Keith Ellison (D-Minn.) said he pressed Obama to issue an executive order requiring federal contractors to provide higher wages.
“He said it’s something that he would take a close look at,” said Ellison, the co-chairman of the Congressional Progressive Caucus. “He should seriously look at doing that because he might be able to help a whole bunch of workers.”
Opponents of raising the minimum wage, including many Republicans and business groups, argue an increase would hurt small businesses already injured by the recession and slow recovery.
And if those small businesses cannot afford to pay the mandated boost, they will end up laying off workers, opponents contend.
There is evidence that income inequality has grown since the economic recession of 2008-2009.
Economists Emmanuel Saez and Thomas Piketty found that between 2009 and 2011, 121 percent of income gains went to the richest 1 percent of the population, according to a report in CBS News.
The other 99 percent, the two said, saw their incomes fall by about half a percent over the same period.
When adjusted for inflation, low-wage workers are actually making less now than they did 50 years ago.
According to a June study from the Congressional Research Service, inflation-adjusted wages have declined from a peak in 1968 and now stand roughly 26 percent below that level when adjusted for price growth. Workers would have to make $10.70 now to make an amount equal to the purchasing power of 1968’s $5.65 minimum wage.
Labor statistics indicate that a relatively small portion of the working population brings home the minimum wage. According to the Labor Department, just 4.7 percent of the 75.3 million workers in the U.S. in 2012 received the minimum wage or lower. (Some wait staff earn less than the middle wage because a portion of their income is paid in tips.)
Of that population, roughly half are under the age of 25 — employees aged 16-19 make up one-fifth of all minimum wage workers.
If Obama can’t convince Congress to raise the minimum wage, he’d be the first president since Ronald Reagan to not sign a wage hike into law.
The minimum wage hasn’t been increased since 2009, when the final stage of a three-step increase approved by Congress in 2007 was implemented.
Before last week, Obama had talked little about the minimum wage since calling for it to be increased in his State of the Union address.
Growing income inequality “undermines the very essence of America,” he told the crowd in Galesburg.
The White House is also making a last stand of sorts on the sequester.
It pressed Congress to undo the cuts earlier this year to no avail, and now faces another year of significant budget cuts unless a deal can be reached to replace them.
Republicans have shown little sign that they would accept the elimination of tax breaks, particularly after the fiscal cliff deal at the beginning of the year raised tax rates on households with annual income above $450,000.
House Democrats are pushing to end the sequester and have offered legislation that would boost the minimum wage to $10.10 per hour and index it to inflation.
Proponents hope protests from fast-food workers, along with Obama’s calls, will galvanize public support.
Ellison and other liberal Democrats are backing strikes held by workers at McDonald’s and other restaurants demanding a $15 minimum wage, as well as the right to unionize.
“There is a groundswell movement going on,” Ellison said. “They’re pressed so hard to the wall that they don’t have any other choice.”
Ellison, who worked at a McDonald’s between high school and college, said workers in the industry earn every penny they make.
“I know it’s hard work. You come home bathed in grease,” he said.
Pay gap morally wrong coming from a man who spends about $50,000,000.00 bucks on “vacations” every month of the year?!
From his lips to God’s ears, I pity him.
I'll say!
You’re right on ALL counts.
God bless and keep you.
Socialism is Feudalism with gun play.
I know who would win the fight if they TRIED. The problem is that one side is so violently evil that they will even butcher children to get what they want. The other side just wants to cook mashed potatoes for the fam. >_<
Funny how lefties embrace moral arguments about the minimum wage but brush aside moral argmuments relating to matters of human life like abortion and contraception.
They’re detached utilitarians when human life is at stake but change the subject to economics and suddenly they become Cotton Mathers. Suddenly they see nothing but good and evil.
I look at Obama’s unearned life of luxury and that makes me think of the gap between him (who is destroying the country), and the American people.
Well? We are pretty sure that it doesn't end well, Bob. We can only hope that the struggle is short and not too bloody .................................................................. FRegards
I always thought the income inequality was a good thing.
Suppose you apply for jobs at two different companies.
At the first company, everyone makes $40,000.
At the second company, the starting salary is $30,000 and there are people making six or seven figures. One guy just broke 8 figures.
You plan to make a career at one of these two companies.
The work is the same at both companies. Do you take the job with no pay inequality, or the one with a huge pay differential?
Must be some world class economists there
Excellent and eventually it comes down to force. They’ll use laws as long as they get what they want.
“Workers would have to make $10.70 now to make an amount equal to the purchasing power of 1968’s $5.65 minimum wage.”
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I hadn’t read this until I read your post, that is really stupid. It is stupid to get the 1968 wage so wrong and it is REALLY stupid to think that $10.70 now would be equal to $5.65 in 1968 in purchasing power. It won’t even equal $1.07 in 1968 in purchasing power. I bought a NEW 1967 Mustang for less than $3,000. In 1968 I was making $475 or so a month and having a ball, spending most of my income on the Mustang, beer and women and just throwing the rest away. If I had been earning $5.65 an hour I would most likely have partied myself to death.
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