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.
How bout we have income TAX equality? How bout that you MARXIST pile of dog sh!t!
Just read this AM some company in Michigan bought Elan Corp in Ireland...now they can move their operations to Ireland where the Corp tax is 12.5%. Good bye USA, Hello Emerald Isle...(we need St Patrick here to chase out the snakes in government).
As far as family income staying flat since 79, well Oboingo, my income from 79 to now has gone up more than 500% not counting for inflation which means it probably has gone up about 200% in constant dollars. Why is that? Well, I changed jobs a few times and each time found one with more responsibility in another state, I gained experience in each position, did well, and completed some additional education to my bachelors degree. I was never arrested, don’t do drugs, am married to a woman, my hair is closely cropped, I have no tatoos, paid off all my debts, did not go bankrupt and received no government assistance. BTW, Oboingo, I started out at minimum wage which was $1 an hour while I attended school.
Of course, because as everybody knows, when the country was founded, we all made the same amount of money.
Raise it to $521/hour and we can all make 1 million a year. Better yet, just print the money and give it to me, why work for it? That’s just another inconvenient step...
How much money is on the sidelines, enriching the ultra-wealthy, because people are holding off investment because of our current regulatory environment?
Democrats are immoral.
(1) When half the working age population is on the government dole it tends to drag down the average family income.
(2) Class envy sells well to those who would prefer not to exert the effort needed to be responsible and productive citizens.
(3) People making the minimum wage in 1968 paid meaningful income taxes. Today they get an earned income tax credit, food stamps and a housing voucher.
(4) McDonalds has built a system that allows them to get by with otherwise unemployable workers. If the employees were good at what they are doing they would be waiting tables at a good resturant and making decent money.
So Obama, are you saying your trickle up poverty schemes are not working?
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.”
What the heck does he know about economics, bad or good? Did he see the stimulus as good? Cash for clunkers as good? Billions in loans and subsidies to green companies that go bankrupt as good?
“The income of the top 1 percent nearly quadrupled from 1979-2007, but the typical family’s incomes barely budged,”
Interesting that he stops at 2007. I wonder what the figured are from 2007 to today.
Ditto! Clearly an act of a person dedicated to dividing and destroying America - with the help of many stupid as well as traitorous citizens [and probably illegal aliens].
Don't be too confident that he is a lame duck... I am not convinced he will leave power in Jan of 2017... he has all the earmarks of all the tyrants we saw in the 20th century. With his computer files on all 'opposition' he can demand an extension of his term without much opposition.
State secession may be the only answer.
Today, as a minimum wage worker, to get more compensation, you need to work more hours at the same job. Raising the minimum wage would hurt ObamaCare, first because it would increase the employers' push to part-time jobs, and it would make it more lucrative for those with multiple sub-30 hour jobs.
In fact, I bet someone could make more take-home pay working two 20-hour part time minimum wage jobs and paying the ObamaCare penalty than working one 40-hour minimum wage job and buying the required subsidized health insurance from their employer.
How does all this end well? Even the $ trillions that Wall Street is compiling may be needed to buy just one Big Mac.
Does that mean that the Obama’s are going to share some of their wealth with poor and hungry?
:-D Are you referring to King Louis 'bama XVI and his lovely Harpie Marie 'bama Antoinette?
All they can offer to share is their hatred.
This mentally-diseased, morally-corrupt jackass of a communist is lecturing the country on what’s “morally right & wrong”? BONG! Next comedian, please!!!
Excellent example:
“Suppose I own a coal mine. I hire two guys to dig coal for me. One guy is weak and lazy and only digs up a ton a day. The second guy is strong and hard-working and digs up 2 tons a day. What would be fair—paying them the same amount (thus eliminating “income inequality”) or paying them according to their output?
Suppose I hire a third guy who is of a scientific bent and who invents a digging machine that can extract 100 tons of coal a day. He had worked for years developing the machine, which cost him a great deal of money to manufacture. By employing his machine in my coal mine, I can generate profits equal to that of 100 times that of my slow worker, or 50 times that of my fast worker. Is it “fair” if I pay the inventor the same amount that I pay digger one or digger two? Or is the “pay gap” that would occur if I pay the inventor an amount proportionate to his production unfair?”
Now, add another parameter to the above.
The desire to succeed + the necessary skills to succeed are obtained and maintained by the individual worker.
Take two individuals, who will use the new coal digging machine:
Group 1. The first is an entitle EO union thug, who feels he/she/it is entitled to the same pay as anyone. He/she/it will perform at the bottom of a performance scale and never do anything to increase their skills and productivity.
Group 2. The second individual doesn’t believe in entitlement, he/she studies hard and works with improved knowledge and consistently out performs the entitled ones, in group 1. He/she consistently out produces the group 1’s.
In Obama’s world, he/she is not entitled to any more pay in spite significantly of their individual higher produtivity.
“Don’t be too confident that he is a lame duck... I am not convinced he will leave power in Jan of 2017... he has all the earmarks of all the tyrants we saw in the 20th century. With his computer files on all ‘opposition’ he can demand an extension of his term without much opposition.”
When he was first running for el Presidento, many of us were warning that he could become another FDR and never leave office.
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