Editor’s Note: Anne Thompson is a policy analyst for the National Employment Law Project, a nonprofit group that promotes policies and programs for lower-wage workers.
Story highlights
Anne Thompson: A new phone app allows you to get Obama to say anything in his rich baritone
Thompson wants Obama to say he has a jobs program that will raise the miminum wage
Raising minimum wage would help working families and power economic recovery, she says
Thompson: Corporate profits are biggest share of GDP since 1950 as wages stagnate
Forget Angry Birds. There’s a new iPhone application that provides hours of entertainment. Released last week, iSpeech Obama allows you to type in any phrase you want and the president’s voice will repeat it back to you.
I played around with the app and couldn’t help but have some ego-stroking fun: “Anne, what an honor to meet you. I love your work.” No matter what you think of Obama’s performance lately, you can’t help but enjoy the president’s thoughtful baritone speaking directly to you and saying exactly what you want to hear.
With so many pundits and politicians weighing in on what Obama should be saying about how to get our country back on track, this should be a popular application. Even though the president can’t seem to find his fighting words of 2008, you can visit the iTunes store for a free download that will deliver you back to the days when Obama fought for Main Street.
If I could have the president say anything, I’d have him say what a growing chorus of commentators have been urging for months now, something like, “Our No. 1 priority is jobs, and I have a bold, detailed plan to rebuild our schools and infrastructure, revive manufacturing and spur our nation’s green industrial revolution.” Let’s hope Obama will lay out this big vision for job creation in his post-Labor Day speech, going further than his small bore approach of late.
And while I’m putting words in his mouth, I’d also have Obama say, “It’s time to raise the minimum wage.” It may sound surprising, but it’s exactly what our economy needs. On the campaign trail, Obama called for raising the minimum wage to $9.50 by 2011; now is the time deliver on that pledge.
Raising the minimum wage would not only help working families, it also would help power the economic recovery. As the economy has sputtered, wages have stagnated, and even folks with jobs are having trouble meeting their families’ basic needs. Accounting for inflation, weekly wages have actually fallen by 1.3 percent in the past eight months, and the Commerce Department reported that consumer spending, which makes up 70 percent of the economy, dropped in June for the first time in nearly two years – both deeply worrying economic indicators.
Raising the minimum wage puts a little more money in pockets of the lowest-paid workers, who have little choice but to spend that additional income immediately, helping restore the consumer spending that businesses need to grow. Preliminary estimates suggest that restoring the minimum wage to $10 per hour by 2014 could generate as many as 160,000 new jobs.
And not only does raising the wage floor help workers making minimum wage, it also boosts pay scales across the whole lower end of our economy. Unfortunately, low-wage work is becoming the livelihood of an ever-growing number of workers. A new analysis by the National Employment Law Project finds that while the majority of jobs lost during and after the recession were in mid-wage occupations, roughly three-quarters of jobs added since job growth resumed are low-wage. And while the bastion of low-paid workers is growing, their wages are declining: workers in lower-wage occupations (with median wages under $13.52) have seen a 2.3 percent decline in real wages since the recession began.
While wages and salaries are now the lowest share of GDP since 1955, corporate profits are the largest share of GDP since 1950. According to research by Andrew Sum at Northeastern University, wages and salaries accounted for just 1 percent of economic growth in the first 18 months after the recession ended, while corporate profits accounted for an unprecedented 88 percent of economic growth. Put quite simply, working people have been getting the shaft.
Not only would a new push to raise the minimum wage help America’s economy and working families – it would help Obama regain populist momentum. Raising the minimum wage is particularly popular with the public, consistently winning support from more than two-thirds of the public.
Opponents are likely to be put on the defensive, struggling to explain why they oppose a modest raise for Main Street as Wall Street enjoys record profits. They will also resurrect the tired old canard that raising the minimum wage leads to job loss, but that theory was first shot to pieces in the 1990s by Alan Krueger, Obama’s nominee to head the Council of Economic Advisers, when he and economist David Card published a groundbreaking study finding that raising the minimum wage boosts incomes of low-paid workers without reducing employment. Nearly two decades of rigorous academic research has confirmed these findings.
With so many Americans struggling, we need the president to raise his voice and find some fighting words. It’s time for President Obama to say – once again – that now is the time to raise the minimum wage.
The opinions expressed in this commentary are solely those of Anne Thompson.