Push for minimum wage hike takes Obama to Michigan

President Obama speaks on raising the minimum wage at Central Connecticut State University in New Britain, Connecticut, March 5, 2014. SAUL LOEB/AFP/Getty Images

After declaring at least a temporary victory in the ongoing battle of the Affordable Care Act Tuesday afternoon, President Obama heads to Michigan Wednesday to renew a push to increase the minimum wage.

It's the time of year when all eyes turn to the midterm election, and Democrats believe boosting the minimum wage is a winning issue. The president has already given several speeches promoting the cause and signed an executive order to raise the minimum wage for federal contract workers. Senate Democrats have followed suit, making it one of the major pieces of their planned legislative agenda (developed in concert with the Democratic Senatorial Campaign Committee), which also includes a focus on ensuring women receive equal pay for equal work, closing tax loopholes, and making college more affordable.

In Michigan, Mr. Obama has an example of a state that already mandates a wage higher than the federal minimum ($7.40 per hour in Michigan vs. $7.25 nationally). There is also a statewide campaign to raise the wage to $10.10 per hour, the figure the president has proposed. A group called Raise Michigan is working on collecting 258,000 signatures necessary to send a proposal to the legislature and onto the ballot in November if it not approved by legislators.

And in Ann Arbor, the college town and site of Wednesday's speech, the city council mandates a so-called "living wage" of $12.52 per hour for employees who receive health care, and $13.96 for those who don't.

The reality is that a minimum wage increase is almost certain not to happen via Washington, D.C., ahead of the election. A report from the Congressional Budget Office (CBO) found that an increase in the minimum wage to $10.10 an hour would reduce employment by 500,000 jobs even as it increases the salaries of 16.5 million people and helps lift 900,000 out of poverty. Republicans have trumpeted this figure as the source of their opposition to a minimum wage hike: it would destroy jobs and hurt workers. Even if a bill were to make it out of the Senate, it would be dead on arrival in the Republican-controlled House.

There are also signs that the $10.10 figure the president and most liberal Democrats have pushed for might be lowered in the search for compromise. The Hill newspaper reported Tuesday that Sen. Susan Collins, R-Maine, is looking for Democrats who might be willing to compromise on a more modest hike.

"Sen. Collins is talking with colleagues on both sides of the aisle about a possible alternative that could raise the wage by a reasonable amount and avoid the loss of the 500,000 jobs that the nonpartisan Congressional Budget Office estimates could result from raising the minimum wage too quickly and by too large an amount," Kevin Kelley, a spokesman for Collins, told the Hill.

The CBO said in the same report that a minimum wage increase to only $9 an hour would reduce employment but just 100,000 jobs. And some Democrats from states with significant Republican populations, like Sens. Joe Manchin of West Virginia, Mary Landrieu of Louisiana and Jeanne Shaheen of New Hampshire haven't signed on as cosponsors of a bill from Sen. Tom Harkin, D-Iowa, to raise the minimum wage to $10.10 an hour.

Regardless, Harkin insists that's the right number.

"It gets you above the poverty line and then you index it in the future," Harkin said in a speech on the Senate floor on Tuesday. He noted that the minimum wage in 1968 was 128 percent of the poverty line, and his proposal takes the wage to just 107 percent of the poverty line.

The fear is that raising the minimum wage to a level that does not get workers above the poverty line and indexing it to inflation could mean it never lifts as many workers out of poverty as they hope.

According to the CBO, if the minimum wage were raised to $9 per hour, earnings would increase by just $9 billion, with 22 percent of that sum going to families making below the poverty threshold.

For now, Reid is backing the higher number. He told reporters on Tuesday that he is still committed to raising the wage to $10.10 an hour, a proposal that could get a vote next week - "depend[ing] on how much Republicans stall us," he said.

  • Rebecca Kaplan

    Rebecca Kaplan is a political reporter for CBSNews.com.

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