MILWAUKEE – Taking a bullish stand on the economy, President Barack Obama is renewing his call for an increase in the minimum wage, looking to give Democrats an issue on which to campaign going into November’s midterm congressional elections.
Timing his push to Labor Day, the traditional start of the fall political campaign, Obama is drawing attention to the most recent economic gains even as he acknowledges there are still working Americans living on the edge of poverty.
Obama took his message on the economy and the minimum wage to Wisconsin, a state that was the epicenter of a fight over the collective bargaining rights of public employees. Joining him on Air Force One for the flight from Washington on Monday were Labor Secretary Tom Perez and several national labour leaders.
Vice-President Joe Biden appeared in Detroit, telling hundreds of union members Monday they deserve a “fair share” of any improvement in corporate profits.
The emphasis on the minimum wage is designed to draw contrasts with Republicans, many of whom maintain that an increase would hurt small businesses and slow down hiring.
Despite the absence of a federal increase, 13 states raised their minimum wages at the beginning of this year. Those states have added jobs at a faster pace than those that did not raise the wage, providing a counterpoint to a Congressional Budget Office report earlier this year that projected that a higher minimum wage of $10.10 an hour could cost the nation 500,000 jobs.
Until now, Obama and his White House aides had been cautious about drawing too much attention to positive economic trends, worried that some may prove illusory or that, even if true, not all Americans were benefiting from them.
White House aides still insist they are not declaring full victory over the lingering effects of a recession that ended five years ago.
But White House officials believe it is time to highlight recent improvements, in part to strengthen what is a difficult political environment for Democrats and to counter public perceptions that are eroding the president’s public approval. Officials say Obama’s most compelling case is to compare the economy now to what he inherited in 2009 in the aftermath of a near Wall Street meltdown, a point Obama often makes when talking to donors at Democratic fundraisers.
“The one thing that I can say is that because of the incredible resilience and strength of the American people, but also because we made some good decisions even though they were tough at the time, we are better off as a country than we were when I came into office,” he said at a fundraiser Friday.
Obama, whose public approval is at about 40 per cent, has been cautious about making appearances in states with close midterm political contests and where his popularity might be even lower.
In Wisconsin, Republican Gov. Scott Walker, who pushed through a law that stripped most public sector union members of their ability to collectively bargain, is now in a tight re-election campaign and has been mentioned as a potential GOP presidential candidate in 2016. Polls find that Walker and Democrat Mary Burke are deadlocked with the election just over two months away.
Walker was at General Mitchell International Airport to greet Obama upon his arrival in Milwaukee. Walker also greeted the labour leaders accompanying Obama, including Mary Kay Henry of the Services Employees International Union and Leo Gerard of the United Steelworkers Union.
The White House is encouraging Democrats to draw attention to the recovery as they head into the November mid-term elections.
In an August memo to House and Senate Democrats, Obama’s top two economic advisers underscored the positive news: more than 200,000 jobs created per month for six consecutive months, a six-year high in auto sales, second-quarter economic growth that exceeded expectations and an expanding manufacturing sector.
Other positive signs:
— The unemployment rate stands at 6.2 per cent, dropping 1.1 points over the past year. The rate reached a high of 10 per cent in October of 2009.
— The economy grew at a rate of 4.2 per cent in the second quarter of the year, though a weak start in the first quarter has lowered projections for the entire year.
— The stock market has rallied, nearly tripling in five years. The Standard & Poor’s 500 index closed above 2,000 for the first time last week.
At the same time, public perceptions appear to present a muddle of confidence and anxiety.
In July, the Conference Board’s consumer confidence index rose to its highest reading since October 2007, two months before the Great Recession began. But a new survey by Rutgers University found that Americans are more anxious about the economy now than they were right after the recession ended.
Among the still-negative signs:
— The number of people unemployed for 27 weeks or more remains elevated, accounting for nearly 33 per cent of the 9.7 million jobless workers. While the rate of long-term unemployed has dropped significantly from its peak in 2010, White House economic advisers Jason Furman and Jeff Zients noted in a blog post Monday, “The long-term unemployment rate remains roughly double its pre-recession average, and … accounts for essentially all of the remaining elevation in the overall unemployment rate.”
— Real hourly wages fell from the first half of 2013 to the first half of 2014 for all income groups, except for a 2-cent increase for the lowest income level, according to the liberal Economic Policy Institute. That minor increase was attributed to minimum wage increases in states where 40 per cent of workers live.