Minimum wage raise proposed by Obama, Republicans disagree

WRITTEN BY: Meredith Dobes
The federal minimum wage may be raised if President Barack Obama's proposal is acted upon.
Image Source: wisconsinjobsnow via flickr
The federal minimum wage may be raised if President Barack Obama's proposal is acted upon.

The federal minimum wage is currently $7.25 an hour, but President Barack Obama asked Congress to raise it to $9 an hour.

Should the proposal be passed, the federal minimum wage would gradually be raised until 2015, when it would reach $9. The minimum wage would rise with inflation in attempt to have it correlate with the cost of living and prevent unemployment from rising.

Some economists theorize that raising the minimum wage may increase unemployment because it increases the cost of business for companies that employ minimum wage workers.

Obama has countered this theory by arguing that CEOs are paid at higher rates today than ever before, and this wealth should be distributed more evenly within companies.

Raising the minimum wage would attempt to benefit low-income families, particularly families where an adult works a full-time minimum wage job and still lives below the poverty line.

Compared to other developed countries, the U.S. has a low minimum wage, according to the International Labor Organization. Japan and Spain are behind the U.S. in terms of how much minimum wage workers make as a percentage of the median wage. Greece, Portugal, Canada, the United Kingdom, the Netherlands, Australia, Belgium, Ireland, France and New Zealand have higher minimum wages.

However, the growth of minimum wages across all developed countries since the onset of the recession in 2008 has declined, according to the International Labor Organization.

Since Obama proposed raising the minimum wage in his State of the Union address Tuesday, House Speaker John Boehner sided with other Republicans, saying that an increase in the minimum wage would cause unemployment to rise.

“It could mean the difference between groceries or the food back; rent or eviction; scraping by or finally getting ahead,” Obama said in his address.

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