The State of the Union address left considerable room for the national audience to shake our heads in dumbfounded disbelief at the shallow and, many times baseless points, the President took as key components during his speech. However, it is one key speaking point that had me thinking, “Where did this come from and why?” The large focus on the minimum wage hike to a magic ten dollars and ten cents number was an absolute laughable issue to be included in a State of Union address which should be an issue to be discussed more on the House and Senate floor than the rare State of the Union.
Every American can agree that we as individuals would love a nice lift to our paychecks from a nationwide minimum wage increase. After all, there are other nations in the world that have a higher minimum wage than the States. I myself lived in Australia were the medium minimum wage is upwards of seventeen dollars an hour. France has a minimum wage over twelve dollars an hour and New Zealanders have a comfortable eleven dollars an hour minimum wage. Unfortunately, before Mr. President can set off angry mobs demanding they deserve better; there are economic reasons why that much higher minimum wage is not plausible anytime in the near future for Americans.
America’s population is 316.1 million while the above mentioned countries have populations of 23, 65 and 4 million people respectively. It is a bit easier to fund and manage a national wage increase when there is a smaller population and smaller amount of illegal immigrants streaming through your countries border to also work the job market. Sure, ten dollars an hour working at a fast food place sounds great, but to increase the minimum wage there needs to be economic growth. The U.S does not have economic growth with the current unemployment rate at 6.7 percent. There needs to be job growth and demand for labor by businesses and employers. Other factors like geographical location where demands and cost of living differs so much that a national wage increase would be unbalanced and an unfair strain to different areas of our vast country. Also, with federal regulations costing a startup business on average 8,000 dollars per employee, a higher minimum wage would even more so discourage hopeful small business owners to hire.
Lastly, where would the nation get the money to pay people more? Raising tax rates. That new higher paycheck people may be dreaming about is only that because at the end of the day it will not raise your financial standard of living when a larger percent of your paycheck is deducted and the costs of rent and food will thus increase as well. While in Australia I witnessed this first hand, and the twenty two dollars an hour I made as a bartender did not make me struggle any less to pay my rent and live on a daily basis.
Obviously the President did not learn his lesson when he preached how Obama care would magically change everyday lives, which has proved realistically it does not change the lives of the American people. It is a President of a nation that should push forth new efforts that prove to work and have economic gains and most importantly can be realistic. Obama has once again made a big demand that this country cannot realistically make happen. I would expect more realism and professionalism from a sixth grader let alone the leader of my nation.
Politisite is interested in what you think. Is President Obama’s initiative to Raise the Minimum Wage a Good Idea?