Obama aims to raise minimum wage

President Barack Obama unveiled plans to increase the federal minimum wage in Tuesday’s State of the Union address, prompting speculation among economists and workers about the consequences of the hike.

Obama announced Tuesday he will issue an executive order raising the minimum wage to $10.10 for federal contract workers, as well as backing a bill in Congress that would raise the wage overall.

“Today, the federal minimum wage is worth about 20 percent less than it was when Ronald Reagan first stood here,” Obama said in the speech. “Tom Harkin and George Miller have a bill to fix that by lifting the minimum wage to $10.10.”

The executive order might help spur legislators to pass an across-the-board increase, said Rob Schofield, policy director of the left-leaning think tank N.C. Policy Watch.

“It’s a great step in the right direction,” he said.

Sen. Tom Harkin, D-Iowa — who is sponsoring the bill along with Rep. George Miller, D-Calif. — followed the State of the Union address with his own statement.

“It is vitally important for Congress to pass my bill to raise the federal minimum wage to $10.10 per hour, and to provide for automatic future increases so that minimum wage workers don’t fall behind again,” Harkin said in a statement.

And a wage increase could be a financial boon to student workers.

“I’d have more financial stability overall,” said UNC student Christina Massie, who earns minimum wage.

Still, Arie Wolf, a December UNC graduate who earns $8.25 an hour, said an increase wouldn’t change his work habits.

“I’d be happy, because I’d be getting more money for the same work,” he said.

But Roy Cordato, vice president for research at the right-leaning John Locke Foundation, pointed out that an increase in minimum wage could lead to a rise in unemployment, especially among teenagers.

“What the minimum wage does is it puts a padlock on the entryway to the labor market for a lot of people — they tend to be teenaged workers, especially black teenage workers, high school dropouts and people with very low skill,” he said.

A March report Brief – Minimum Wage.pdf by N.C. Policy Watch predicted that an increase could affect more than 1 million N.C. workers.

In the meantime, Obama urged state officials to take minimum wage hikes into their own hands.

“To every mayor, governor and state legislator in America, I say, you don’t have to wait for Congress to act.”

But Schofield said not to expect a North Carolina minimum wage hike anytime soon.

state@dailytarheel.com