State of the Union reality check

Of all the things President Obama shared with the nation at his State of the Union, HR managers and their employers no doubt paid closest attention to his remarks on immigration and the minimum wage.

Thing is, no one should expect the White House or Congress to get serious about either topic.

Twenty states plus the District of Columbia already have minimum wages higher than the federal level. As the Center for Economic and Policy Research notes:

“As of January 1, 2014, 13 states raised their minimum wage, with California set to follow suit with an increase to $9 in July. Of these 14 state increases, nine are automatic adjustments based on indexing the value of the minimum wage to the cost of living, while four (NJ, CT, NY, RI) are the product of either ballot-measures or legislative action.”

Obama, in case you missed his speech, wants to boost the federal minimum wage to $10.10 an hour and announced that any federal contract workers hired in the future would get paid at that level. About 3.6 million workers earn wages at or below the federal minimum, according to the Labor Department. The president’s plan would affect maybe 200,000 people, so clearly most Americans earning the minimum wage will see no change whatsoever.  

Not as if Obama has much choice. Republicans have shown little support for raising the minimum wage, and business groups such as the National Retail Federation oppose it, so until Democrats can seize back the House, the idea is going nowhere fast.

Congress, of course, ignored Obama’s plea in last year’s State of the Union to raise the minimum wage, and mid-term congressional elections this fall will only complicate things.

“It would be challenging to move the needle on inequality in the near term even with Congress’s cooperation,” said Jared Bernstein, Vice President Joe Biden’s former chief economist. “It would be really hard to do it without.”

You think?

Whatever side of the aisle they occupy, lawmakers might want to listen to what John Arensmeyer, CEO of the Small Business Majority, an advocacy group with 25,000 members, says on the topic:

“We did research last year, a survey. Essentially, two-thirds of the respondents said they were in favor of it. Why? We’re keeping money flowing through the economy. Second, it reduces the burden on taxpayers by having fewer people on public assistance.”

“If people make more money, they’re most likely to be using it at small businesses. It’s all part of an economic cycle. Studies show it would put $22 billion into the economy and would create jobs.”

It’s hard to argue with that logic, but I’m sure plenty of federal lawmakers will do so nonetheless.

Meanwhile, I woke up the morning after the president’s speech thinking immigration could finally get the attention it deserves from both chambers.

Just listen to the delight with which Sen. Lindsey Graham, the South Carolina Republican who helped write that chamber’s bipartisan bill, greeted the president’s words.

“He handled it just perfectly, I thought,” Graham said. “That’s just exactly what the president ought to do – encourage us to act, you know, not get too deep into the weeds.”

Even before lunch, however, my optimism was gone, shot to hell by Sen. Marco Rubio.

The Florida first-termer, at a breakfast organized by the Wall Street Journal, said the GOP was concerned about whether the president could be trusted to enforce tough security requirements in the Senate’s bipartisan immigration bill Rubio helped write.

Rubio said the administration lost credibility because of how it handled the 2012 attack against a U.S. outpost in Libya and accusations that the IRS targeted conservative groups.

“The central impediment to making progress on this issue was people would say to me, ‘We understand that you put all this security stuff in the bill, but we don’t think it matters and we just don’t think government will enforce the law anyway,’” Rubio said.

“’You can write whatever you want in that bill. But the federal government will not enforce the law.’ As a result, they will just do the legalization part but they won’t do the enforcement part.”

Things weren’t much better over in the House.

Here’s what Republican Rep. Bob Goodlatte of Virginia, chairman of that chamber’s Judiciary Committee, had to say.

“Our immigration system is in desperate need of reform. However, we don’t need another massive, Obamacare-like bill that is full of surprises and dysfunction after it becomes law.”

So we’re back to square one on a) the minimum wage and b) immigration.

I can’t wait until next year’s State of the Union.

About the Author
Allen Greenberg

Allen Greenberg

Allen Greenberg is the retirement industry news editor at BenefitsPro.com. Follow him via Twitter @AllenGreenberg. Email him at agreenberg@benefitspro.com or call 720-895-3965.


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