WASHINGTON — President Barack Obama called for a 24% hike to the nation’s federal minimum wage Tuesday evening in his State of the Union address, the first such increase since 2009 and the highest in real terms for more than 30 years.
The move — which will face a tough fight from Congressional Republicans — would provide a particular boost for young workers and, in particular, the waiters, busboys, baristas, bartenders, and other food-service workers who make up the largest share of those earning the federal minimum. It would also likely face opposition from their employers.
The measure would raise the federal minimum wage in stages to $9 per hour from $7.25 per hour by the end of 2015 — it would then be indexed to inflation. The White House said the increase would affect over 15 million workers, allowing millions to rise out of poverty. The increase restores the inflation-adjusted minimum wage to 1981 levels.
The proposal actually represents a step back from Obama’s campaign rhetoric in 2008, when he called for a $9.50 minimum wage by 2011.
Senior administration officials said Tuesday that Obama is a longtime supporter of efforts to raise the minimum wage and is renewing his push in his address to Congress to ensure the people who work full-time jobs do not live in poverty. Officials, briefing the press on the condition of anonymity and that they not be directly quoted, noted that corporate executive and CEO pay has dramatically risen over the past few years while the minimum wage has been stagnant.
“We know our economy is stronger when we reward an honest day’s work with honest wages,” Obama said. “But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong.”
“So here’s an idea that Governor Romney and I actually agreed on last year: Let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on,” Obama added.
The proposal is one component of Obama’s economic-heavy address, in which he calls for creating “ladders of opportunities into the middle class” — a series of new and old proposals to raise Americans out of poverty.
It would also raise the minimum wage for tipped hourly employees.