Kathy Plonka, Associated Press/The Spokesman-Review
In Tuesday night's State of the Union address, President Barack Obama reignited a debate when he called for raising the minimum wage to $9 an hour.
"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," Obama said.
The current minimum wage is $7.25 an hour, last raised in 2007 before the recession. The U.S. minimum wage was first introduced in 1938 and has been an economic and political hot topic ever since.
"Today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line," said Obama. "Here’s an idea that Governor Romney and I actually agreed on last year: let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on."
House Republicans, however, disagreed. “When you raise the price of employment, guess what happens? You get less of it,” Speaker of the House John Boehner said in a press conference Wednesday morning. “At a time when Americans are still asking the question ‘Where are the jobs?’ why would we want to make it harder for small employers to hire people?”
One of the most repeated arguments against raising the minimum wage is that it creates disincentive for companies to hire and stifles job creation. However, an analysis by the Center for American Progress Action Fund found five recent studies showing that increasing the minimum wage — even during periods of high unemployment — does not have a negative impact on job growth.
According to a White House press release, raising the federal minimum wage would benefit 15 million workers, and some economists say it would benefit even more. About two-thirds of minimum-wage workers are women, and minimum-wage workers brought home 46 percent of their household's total income in 2011.
"Raising the minimum wage directly helps parents make ends meet and support their families," said the White House press release.
The minimum wage had its maximum purchasing power in 1968. Since then, inflation has grown faster than the national minimum wage. Rising tuition and health care costs have made living at minimum wage even tougher. Currently, 19 states and the District of Columbia have state minimum wages above $7.25.
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