President Obama believes that America is ready to raise the minimum wage by almost $2, urging Congress to bring the federal rate to $9 an hour by 2015. The message, during his State of the Union address, can be seen as a significant vote of confidence in the economy, as a shift in the nation’s pay scale could have a large effect on employers. A statement released by the administration says that 15 million workers would benefit from the change and that it would offset inflation.
“Right now, a full-time minimum wage worker makes $14,500 a year – which leaves too many families struggling to make ends meet, with a family of four with a minimum wage worker, still living below the poverty line,” the statement read.
Advocates for minimum wage workers argue that the current rate, and even Obama’s proposed increase, is inadequate for employees hoping to sustain a family. The federal poverty line is set at $11,170 for an individual and $23,050 for a family of four, which would place a four-person family with two minimum wage workers just barely over the poverty line.
The increase would also affect workers making above minimum wage, because employers would be forced to adjust those pay scales. Critics of Obama’s proposal believe that this could lead to fewer jobs, if employers cannot cover the increase in labor costs. House Speaker John Boehner was among those against raising the minimum wage.
“When you raise the price of employment, guess what happens? You get less of it,” Boehner told reporters Wednesday. “At a time when the American people are still asking the question, ‘Where are the jobs?’ why would we want to make it harder for small employers to hire people?”
Though states are not required to adhere to the federal minimum wage, only Georgia, Arkansas, Wyoming and Minnesota have lower pay rates. Washington has the highest minimum wage of any state, at $9.19.