WASHINGTON (Feb. 13, 2013) — President Barack Obama called for a raise in the federal minimum wage to $9 per hour in his Feb. 12 State of the Union address, sparking support from progressive groups but opposition from small business associations.
The minimum wage is $7.25 per hour, but as President Obama noted in his address, 19 states already have approved increases.
"Even with the tax relief that we've put in place, a family with two kids that earns the minimum wage still lives below the poverty line," the president said.
Raising the minimum wage to $9, he said, "could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead."
Small business groups have long opposed minimum wage legislation on the grounds that it hurts small businesses and stunts job growth.
"When you raise the price of anything, people take less of it, including labor," said William C. Dunkelberg, chief economist for the National Federation of Independent Business (NFIB).
In July 2009, Congress raised the minimum wage 10.6 percent, according to Mr. Dunkelberg. In the following six months, nearly 600,000 minimum-wage jobs disappeared despite economic growth of nearly 4 percent, he said.
"About 60 percent of the officially poor don't work, so the only thing raising the minimum wage does for them is to make it harder for them to get a job if they ever decide they want one," Mr. Dunkelberg said.
However, the Center for American Progress Action Fund, an advocacy group for labor and progressive causes, said the idea that minimum wage hikes kill jobs is false.
"A significant body of academic research has found that raising the minimum wage does not result in job losses, even during hard economic times," stated an article on the center's website.