During the 2008 campaign, presidential candidate Barack Obama made a pledge to raise the minimum wage to $9.50 per hour by 2011. Promises like this one inspired a generation of young voters, excited long-neglected progressive voters and gave hope to millions of his supporters across the country.
President Obama ran a campaign of soaring rhetoric and uplifting ideas. Amidst two unpopular wars, a rapidly deteriorating financial crisis and the wildly unpopular presidency of George W. Bush, Americans were desperate for a change. He was viewed as a “transformational” candidate, a president who would turn the page on the stagnant politics of Washington.
It is now four years later, and there has been no increase to the minimum wage. There has been no congressional vote, much less a whisper from the White House on the minimum wage.
President Obama understood the importance of this issue in 2008. The merits of raising the minimum wage haven’t changed since then, but his political courage has. The inflation-adjusted value of the minimum wage has been in decline since the 1960s, losing over 30 percent of its value and leaving hard-working Americans struggling to get by from paycheck to paycheck. At the same time, the cost of living has continued to rise steadily, further eroding the value of a minimum wage. Had the minimum wage kept pace with inflation since 1968, today it would be at $10.57 per hour, instead of the current federal minimum wage of $7.25.
Studies show that the minimum wage could help jump-start the economy and increase consumer spending. A 2011 study by the Chicago Federal Reserve Bank found that for every dollar increase to the hourly pay of a minimum wage worker, the result is $2,800 in new consumer spending from that worker’s household over the year. And a 2009 study from the Economic Policy Institute estimated that simply by raising the minimum wage to $9.50 per hour, $60 billion in additional spending would be added to the economy over a two-year period.