The Dangers of Obama Aiming Too Low on Inequality Issues in the State of the Union

[xchrom]

http://www.alternet.org/economy/dangers-obama-aiming-too-low-inequality-issues-state-union



On Monday, the president’s allies leaked the top points of his State of The Union speech to be delivered tonight and left no doubts that Obama would focus on America’s lack of upward mobility. Looking past his congressional enemies, he will issue executive orders to federal agencies to take steps to address inequality issues, such as imposing mandates for federal contractors. And looking at Capital Hill, Obama will again call to raise the federal minimum wage to $10.10 and start campaigning for it nationwide.

The 2014 State of the Union will build on Obama’s big inequality speech last December, we are told, with the top action item raising the federal minimum from its current $7.25 rate. In the balcony with the First Lady will be a Michigan pizzeria owner paying $10 an hour, as an example that it can be done. Also in the presidential skybox will be a woman featured in Maria Shriver’s recent report on low-income women living on the brink. On Wednesday, Obama will speak at a CostCo and a U.S. Steel plant.

There is no doubt that raising the federal minimum wage is very important for millions of workers. But it is the starting point, not the finish line, for a national discussion on wage suppression, where, except for the very top, American pay scales have remained stuck for decades despite growing productivity.

Just how far Congress or White House can go to offset America’s rampant inequality is an open question. Obama’s $10.10 wage, about a $1 more than most state minimums, is not going to end paycheck-to-paycheck struggles for the poorest Americans. Last year’s fast food worker strikes demanded $15 an hour, plus benefits. Top labor economists say the target should be at least $12.50 an hour—closer to Germany’s new minimum wage.

[Bonobo]

1. Whatever he says will be attacked with equal vigor, so...

The only sensible and wise strategy (assuming he wants such Progressive goals) would be to push much further than he wants in order to strike the best deal.

But then again, it is so obvious that it brings up conclusions that are uncomfortable to deal with.

[pampango]

2. "With wage suppression and income stagnation, listen carefully to Obama’s words—and to his top

Democratic allies in Congress—and see where they frame the problems. Will they only talk about raising wages for the poor, not higher up the economic ladder? Will they talk about new government formulas for future wage increases—replacing inflation with productivity measurements—or skip that? Will they push for a new way to define the federal poverty line, not just keep using 1960s baselines that are outdated today?

And will they link the wage and inequality discussion include Social Security? Obama’s handlers said that Senate Majority Leader Harry Reid will schedule a vote on a $10.10 minimum wage bill in early March. Should that pass Congress, it could become a striking benchmark in the retirement security debate. Today, the average monthly Social Security check for elderly Americans is $1290. If that were a monthly wage, it would be equal to $8.06 a hour—far below the minimum living wage for the poorest Americans.

Thanks for posting, xchrom.