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Why the minimum wage issue is a win-win for Obama

The beauty of the minimum-wage issue — and what distinguishes it from just about everything else on Obama's plate — is that the president wins either way.
Fast food workers and activists demonstrate outside McDonald's downtown flagship restaurant on July 31, 2014 in Chicago, Illinois.
Fast food workers and activists demonstrate outside McDonald's downtown flagship restaurant on July 31, 2014 in Chicago, Illinois.

A new White House report touts progress toward increasing the minimum wage from the current $7.25 per hour to $10.10 per hour. The good news is that since President Obama proposed the increase in his 2014 State of the Union speech, 13 states plus the District of Columbia have increased their minimum wage. The minimum wage has also been raised locally in Seattle; Berkeley, Calif.; and Maryland’s Montgomery and Prince George’s Counties, among other places. Obama signed an executive order mandating that federal contractors pay $10.10 per hour. Local jurisdictions, including Philadelphia, Louisville, and Ypsilanti, Mich., have done the same for city workers and contractors.

The bad news is that the White House seems pretty unlikely to get a minimum wage bill through Congress this year, even in the Democratic-controlled Senate, where it’s been filibustered.

Or is that good news, too? The beauty of the minimum-wage issue — and what distinguishes it from just about everything else Obama is grappling with just now — is that the president wins either way.

If Obama gets the minimum-wage increase, he’ll improve the lives of low-wage workers (including many earning above the minimum wage, since raising it has the effect of boosting higher wages as well). The nonprofit Economic Policy Institute estimates that raising the minimum wage to $10.10 would increase wages, directly and indirectly, for about 28 million workers, and would boost GDP by $22 billion.

In theory raising the minimum wage ought to increase unemployment, but in practice, economists (including a few at the not-exactly-left-leaning Goldman Sachs) have lately  struggled to find any real-world evidence of that happening. Job creation is actually faster in the states that have raised the minimum wage.

And if President Obama doesn’t get the increase? That will be a misfortune for those 28 million workers. But it will be an electoral boon for Obama and the Democrats come November, because (according to a recent CNN poll) 71% of all Americans favor increasing the minimum wage. Even among Republicans, a 54% majority favors increasing it. People who describe themselves as “conservative” favor it by 53%; “moderates” by 78%; and independents by 67%. (“Liberals” and Democrats, unsurprisingly, favor it by 88% and 90%, respectively.)

Republican opposition to a minimum-wage increase is a classic “wedge” issue, and Democrats could use one. Republicans are still projected by Five Thirty-Eight’s Nate Silver to take the Senate in November. The Democrats have little chance of retaking the House, and may even lose a few seats. And no one expects the GOP to lose control of a majority of the country’s state legislatures and governorships (some gains are likely in the former; some slippage in the latter).

The minimum wage issue, though, could help. And Democratic candidates are trying it out:

  • In Iowa, Democratic Senate candidate Bruce Braley has run an ad that features audio of his opponent, Republican Jodi Ernst, saying “I do not support a federal minimum wage” (she favors one at the state level) and footage of her saying “I think $7.25 is appropriate for Iowa.” Polls show that the race is very close, but Iowans’ views on the minimum wage are not. Sixty-five percent favor raising it.
  • In Arkansas, Democratic gubernatorial candidate Mike Ross is attacking Republican Asa Hutchinson for opposing a ballot measure to increase the minimum wage. (Hutchinson says he prefers that the state legislature raise it, even though its last three attempts to do so failed.) Hutchinson is leading in the polls, but the minimum-wage increase is favored by fully 79% of likely Arkansas voters.
  • In Virginia, Republican Senate candidate Ed Gillespie was caught on camera saying minimum-wage jobs are “where you learn the social aspects of work.” In fact, the average worker whose income would rise, directly or indirectly, as a result of Obama’s proposed minimum-wage increase supplies half of his or her family’s income.  The proportion of minimum-wage workers who are teenagers (one-quarter) is smaller than the proportion who are women aged 25 and over (one-third). Gillespie’s Democratic opponent, the somewhat conservative Sen. Mark Warner, favors a minimum-wage increase (though he’s said he’s open to one smaller than Obama’s). Though Warner has a strong lead in the race, his campaign Web site didn’t pass up this opportunity to charge that Gillespie’s “insulting comments demean Virginians who work long hours just to make ends meet.” Sixty-six percent of Virginians favor increasing the minimum wage — including 60% of independents and 41% of Republicans.

Democrats have done well in the past spotlighting Republican opposition to the minimum wage. In 1996, Clinton used the issue to bloody his electoral opponent, Senate Majority Leader Bob Dole, who (according to a recent Washington Monthly article) was so frustrated by the experience that he quit the Senate. After Dole left, Congress raised the minimum wage and Clinton won reelection handily. Two years later, Gene Sperling, economic advisor to Bill Clinton (and subsequently to Obama) advised Clinton against supporting a proposal by Sen. Edward Kennedy, D.-Mass., to raise the minimum wage automatically to reflect inflation. Among the reasons Sperling cited was “it would take away a good political issue.” (As a result, the minimum wage didn’t rise again for another nine years.) President Obama’s proposal would index future increases.

The wonder is that the Democrats took so long in making a minimum-wage increase a priority. In the 2008 election Obama proposed raising it to $9.50, but once in office he showed little interest in the issue. In his 2012 reelection, he largely passed up the opportunity to use it against his opponent, Mitt Romney. In 2013 he raised the issue in his State of the Union address, but, inexplicably, only proposed raising the minimum to $9 per hour. (Had his 2008 proposal kept up with inflation, he would have proposed more like $10.13 per hour.) Only in 2014 did Obama embrace the issue with gusto, proposing an increase to $10.10.

Well, better late than never. At a moment when world events have Obama and the Democrats taking some licks, this is an issue that will let them administer some.