WASHINGTON: President Barack Obama’s call to raise the minimum wage to $9 an hour and boost it annually to keep pace with inflation is already getting a trial run. Ten states make similar cost-of-living adjustments, including Washington state, where workers earn at least $9.19 an hour, the highest minimum in the country.
In all, 19 states and the District of Columbia have minimum wages set above the federal rate of $7.25, a disparity Obama highlighted in his State of the Union address as he seeks to help the nation’s lowest-paid workers. Ohio’s minimum wage is $7.85 an hour.
Obama’s proposal is renewing the age-old debate between advocates who claim boosting the minimum wage pumps more money into the economy, helping to create new jobs, and business groups that complain it would unfairly burden employers and curb demand for new workers.
And it faces certain hurdles in Congress, as top Republicans including House Speaker John Boehner wasted little time dismissing the proposal.
More than 15 million workers earn the national minimum wage, making about $15,080 a year. That’s just below the federal poverty threshold of $15,130 for a family of two.
Obama said it’s time to raise the minimum wage “because if you work full time, you shouldn’t be in poverty.”
Advocates say a minimum wage increase can lead to even broader economic benefits.
“These are workers who are most likely to spend virtually everything they earn, so it just pumps money back into local economies,” said Christine Owens, executive director of the National Employment Law Project.
But William Dunkelberg, chief economist for the National Federation of Independent Business, said the increase would hit businesses and hurt low-wage workers by reducing demand for their services.
“The higher the price of anything, the less that will be taken, and this includes labor,” he said. “Raising the cost of labor raises the incentive for employers to find ways to use less labor.”