Publisher: Obama wrong on minimum wage increase

President Barack Obama’s recent State of the Union speech demonstrated the profound difference between Democrats and Republicans on solutions to our current challenges in America and on the direction and role of government, says Business Report Publisher Rolfe McCollister in his latest column. “The president had an hour on primetime television to outline his vision for the next four years, which was fairly broad on themes and light on specifics (and on ways to pay for them). But the philosophy was evident and his direction clear,” McCollister says. One specific issue Obama touched on is a proposal to raise the minimum wage from $7.25 an hour to $9—a 24% increase. Republican House Speaker John Boehner said of the idea: “When you raise the price of employment, guess what happens? You get less of it. Why do we want to make it harder for small employers to hire people?” Boehner noted many minimum-wage workers are at that pay level because they “come to the workforce with no skills,” adding that to raise the minimum wage would only make it “harder for them to acquire the skills they need to climb that ladder successfully.” McCollister agrees. “As you become more skilled, your pay increases—or you can take those skills into the marketplace. But your skills don’t just instantly become worth $9 an hour because the president says so,” he says. “What about the employee who has worked up to $9/hour—do they get a 24% raise too? This is what happens when Washington politicians try to run business.” Read the full column here, and send your comments to editors@businessreport.com.