By Michael Romain
President Barack Obama delivered his fifth State of the Union address last night. The President struck a balance between reaching across the aisle to an extremely intransigent, and increasingly dysfunctional, Republican Party and sending the message that he was prepared to go about pursuing his agenda alone–most notably by executive order. The theme the President emphasized on Tuesday night was opportunity. “Opportunity is who we are,” he said. However, as the President emphasized, for too many Americans, opportunity is hard to come by these days. Wages are historically depressed. Economic mobility from the lower to the middle, and from the middle to the upper, classes is as static as its ever been. Poverty is spreading into areas where it was once thought unimaginable–the suburbs. With this economic reality in mind, the President made a series of proposals.
On Restoring Unemployment Insurance
President Obama: “This Congress needs to restore the unemployment insurance you just let expire for 1.6 million people.”
Maywood’s 10-Year Unemployment Rate (Jan ’04 – Nov ’13):
On Raising the Minimum Wage
The President: “We know our economy is stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher.
“Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. We should be able to get that done.”
The New York Times: “‘The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by, let alone to get ahead,” [the President] added. “And too many still aren’t working at all. So our job is to reverse these trends.’
“To do so, the president announced an executive order raising the minimum wage to $10.10 an hour for future federal contract workers and the creation of a new Treasury savings bond for workers without access to traditional retirement options.”
The President hopes that by signing an executive order raising the minimum wage for future federal contract workers–which he can do without the approval of Congress–he’ll be able to pressure Congress to increase the federal minimum wage for all employees. And the $10.10 figure didn’t come out of the blue.
According to the Huffington Post, “Progressive economists like to point out that if the minimum wage had kept pace with inflation since its high in the late 1960s, it would now be above $10. Of course, it’s possible the president’s original $9 proposal could weaken Democrats’ bargaining position with the House GOP.”
Right now, the minimum wage in Illinois $8.25 an hour, while the federal minimum wage is $7.25 an hour.
Maywood Poverty Stats
Breakdown of Minimum Wage Beneficiaries
On Expanding the Earned Income Tax Credit
President Obama: “There are other steps we can take to help families make ends meet, and few are more effective at reducing inequality and helping families pull themselves up through hard work than the Earned Income Tax Credit […] Right now, it helps about half of all parents at some point. But I agree with Republicans like Senator Rubio that it doesn’t do enough for single workers who don’t have kids. So let’s work together to strengthen the credit, reward work, and help more Americans get ahead.”
The Earned Income Tax Credit, like Mr. Obama’s healthcare act, is a policy that, at one point or another, has had strong conservative support. It was enacted in 1975 and designed to offset social security taxes and give poor people incentives to work. According to Time‘s Swampland blog, “More than 27 million families and individuals received about $62 billion through the EITC in 2011, according to the IRS. Individuals with three children can earn a maximum credit approaching $6,000; low-income workers without kids receive a little under $500.” The President, however, thinks that the EITC doesn’t go far enough. To see if you qualify for the Earned Income Tax Credit, click here. VFP