The Economic Case for Raising the Minimum Wage

In his 2014 State of the Union address, President Obama announced his intention to move forward using his own authority and raise the minimum wage for workers on new and replacement Federal service contracts to $10.10 an hour. As the President said, “If you cook our troops’ meals or wash their dishes, you shouldn’t have to live in poverty.” Yesterday,  President Obama signed an Executive Order making this vision a reality.

This step is a smart business decision for the government because it will make Federal procurement more economical and efficient. An extensive body of research suggests that giving a raise to lower-income workers reduces turnover and raises morale, and can thus lower costs and improve productivity. In addition, firms that already pay a decent wage and realize these kinds of efficiencies should not have to radically alter their bids to comply with the Executive Order. This means the new rule can allow Federal agencies to select from a higher-quality group of bidders without a marked increase in costs—a fact that is borne out by empirical studies of municipal government contracts.

This Executive Order will also give a boost to hardworking Americans struggling to make ends meet, and the President still believes that Congress should act to do the same for millions more.

A presentation prepared by the Council of Economic Advisers, “The Economic Case for Raising the Minimum Wage,” can be viewed below or online here:


President Obama: Making Our Economy Work for Every Working American

Yesterday, President Obama spoke about what he called the defining challenge of our time: reversing a decades-long slope toward growing inequality and a lack of upward mobility. It’s a trend that has jeopardized middle-class America’s basic bargain, the idea that if you work hard, you have a chance to get ahead.

In the years after World War II, America built the largest middle class the world has ever known, President Obama said.

“[D]uring the post-World War II years, the economic ground felt stable and secure for most Americans, and the future looked brighter than the past. And for some, that meant following in your old man’s footsteps at the local plant, and you knew that a blue-collar job would let you buy a home, and a car, maybe a vacation once in a while, health care, a reliable pension. For others, it meant going to college — in some cases, maybe the first in your family to go to college. And it meant graduating without taking on loads of debt, and being able to count on advancement through a vibrant job market.”

“Everyone’s wages and incomes were growing,” President Obama said “And because of upward mobility, the guy on the factory floor could picture his kid running the company some day.”

But by the late 1970s, this social compact began to unravel as jobs began to disappear and our economic foundation weakened. Inequality started to grow, and it got harder for children of lower-income families to move upward. Today, a family in the top 1 percent has a net worth 288 times higher than the typical family. And a child born in the top 20 percent has about a 2-in-3 chance of staying at or near the top, while a child born into the bottom 20 percent has a less than a 1-in-20 shot at making it to the top.

“The idea that so many children are born into poverty in the wealthiest nation on Earth is heartbreaking enough,” President Obama said.

“But the idea that a child may never be able to escape that poverty because she lacks a decent education or health care, or a community that views her future as their own, that should offend all of us and it should compel us to action. We are a better country than this.

“So let me repeat: The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American Dream, our way of life, and what we stand for around the globe.”

“We can make a difference on this,” President Obama said. “In fact, that’s our generation’s task — to rebuild America’s economic and civic foundation to continue the expansion of opportunity for this generation and the next generation.”

The President said that this is the reason he ran for office.

“I take this personally. I’m only here because this country educated my grandfather on the GI Bill. When my father left and my mom hit hard times trying to raise my sister and me while she was going to school, this country helped make sure we didn’t go hungry. When Michelle, the daughter of a shift worker at a water plant and a secretary, wanted to go to college, just like me, this country helped us afford it until we could pay it back.

“So what drives me as a grandson, a son, a father — as an American — is to make sure that every striving, hardworking, optimistic kid in America has the same incredible chance that this country gave me. It has been the driving force between everything we’ve done these past five years. And over the course of the next year, and for the rest of my presidency, that’s where you should expect my administration to focus all our efforts.”

Read President Obama’s full remarks here.

Watch and share today’s video.

President Obama Announces New Diplomatic Efforts With Iran—The President Also Issues Warning to Congress

Today, President Obama spoke with President Rouhani of the Islamic Republic of Iran, the first communication between an American and Iranian President since 1979.

The two leaders discussed ongoing efforts to reach an agreement over Iran’s nuclear program. In a statement this afternoon from the White House Briefing Room, President Obama said that while “success is by no means guaranteed, I believe we can reach a comprehensive solution.”

I’ve directed Secretary Kerry to continue pursuing this diplomatic effort with the Iranian government.  We had constructive discussions yesterday in New York with our partners — the European Union, the United Kingdom, France, Germany, Russia and China — together with the Iranian Foreign Minister.  Going forward, President Rouhani and I have directed our teams to continue working expeditiously, in cooperation with the P5-plus-1, to pursue an agreement.  And throughout this process, we’ll stay in close touch with our friends and allies in the region, including Israel.

“Resolving this issue, obviously, could also serve as a major step forward in a new relationship between the United States and the Islamic Republic of Iran — one based on mutual interests and mutual respect,” President Obama said. “It would also help facilitate a better relationship between Iran and the international community, as well as others in the region — one that would help the Iranian people fulfill their extraordinary potential, but also help us to address other concerns that could bring greater peace and stability to the Middle East.”

Today’s announcement comes on the same day as a major diplomatic breakthrough on Syria, President Obama said this afternoon, as the UN Security Council will vote on a Resolution that would require the Assad regime to put its chemical weapons under international control, so they can ultimately be destroyed.

“This binding resolution will ensure that the Assad regime must keep its commitments, or face consequences,” President Obama said.

President Obama also spoke about two issues looming closer to home: the need for Congress to pass a budget, and pay our bills on time.

“If Congress chooses not to pass a budget by Monday — the end of the fiscal year — they will shut down the government, along with many vital services that the American people depend on,” President Obama said. “They also have to vote within the next couple of weeks to allow the Treasury to pay the bills for the money that Congress has already spent.”

My message to Congress is this: Do not shut down the government. Do not shut down the economy. Pass a budget on time. Pay our bills on time. Refocus on the everyday concerns of the American people.

Watch and share today’s video.

President Obama Speaks on the Economy

Today President Obama returned to Knox College in Galesburg, Illinois to kick off a series of speeches about his vision for rebuilding an economy that puts the middle class — and those fighting to join it – front and center.

In his remarks, President Obama laid out the progress we’ve made together in the five years since the start of the recession that cost millions of Americans their jobs, their homes, and their savings

“Thanks to the grit and resilience and determination of the American people — of folks like you — we’ve been able to clear away the rubble from the financial crisis. We started to lay a new foundation for stronger, more durable economic growth.

“As a country, we’ve recovered faster and gone further than most other advanced nations in the world. With new American revolutions in energy and technology and manufacturing and health care, we’re actually poised to reverse the forces that battered the middle class for so long, and start building an economy where everyone who works hard can get ahead.”

But, he said, “I’m here to tell you today that we’re not there yet.”

“As Washington prepares to enter another budget debate, the stakes for our middle class and everybody who is fighting to get into the middle class could not be higher,” he said.

“And that’s why, over the next several weeks, in towns across this country, I will be engaging the American people in this debate.”

“I’ll lay out my ideas for how we build on the cornerstones of what it means to be middle class in America, and what it takes to work your way into the middle class in America: Job security, with good wages and durable industries. A good education. A home to call your own. Affordable health care when you get sick. A secure retirement even if you’re not rich. Reducing poverty. Reducing inequality. Growing opportunity. That’s what we need.”

A better bargain for the middle class — an economy that grows from the middle out, not the top down, the President explained. “That’s where I will focus my energies not just for the next few months, but for the remainder of my presidency.”

Learn more:

President Obama Announces New National Security Team Members

President Obama announces that after more than four years overseeing the work of the National Security Council, Tom Donilon will depart in July as National Security Advisor and will be succeeded by Susan Rice. Ambassador Rice will be succeeded by Samantha Power as the next U.S. Ambassador to the United Nations, pending Senate confirmation. June 5, 2013.

“Of all the jobs in government, leading my national security team is certainly one of the most demanding, if not the most demanding. And since the moment I took office, I’ve counted on the exceptional experience and insights of Tom Donilon. Nearly every day for the past several years I’ve started each morning with Tom leading the presidential daily brief, hundreds of times, a sweeping assessment of global developments and the most pressing challenges. As my National Security Advisor his portfolio is literally the entire world.

“He has definitely advanced our strategic foreign policy initiatives while at the same time having to respond to unexpected crises, and that happens just about every day. He’s overseen and coordinated our entire national security team across the government, a Herculean task. And it’s non-stop — 24/7, 365 days a year.

“Today, I am wistful to announce that after more than four years of extraordinary service, Tom has decided to step aside at the beginning of July. And I am extraordinarily proud to announce my new National Security Advisor, our outstanding Ambassador to the United Nations, Susan Rice as well as my nominee to replace Susan in New York, Samantha Power.”

“This team of people has been extraordinarily dedicated to America,” President Obama said.

“They have made America safer. They have made America’s values live in corners of the world that are crying out for our support and our leadership. I could not be prouder of these three individuals — not only their intelligence, not only their savvy, but their integrity and their heart.”

Watch and share today’s video.


President Obama Discusses U.S. Counterterrorism Strategy

President Barack Obama delivers a speech at the National Defense University at Fort McNair in Washington, D.C. (Official White House Photo by Pete Souza)
President Barack Obama delivers a speech at the National Defense University at Fort McNair in Washington, D.C. (Official White House Photo by Pete Souza)

Speaking at National Defense University yesterday, President Obama laid out the framework for U.S. counterterrorism strategy, while balancing our obligation to Constitutional principles, and our historic role in the world.

“For over two centuries, the United States has been bound together by founding documents that defined who we are as Americans, and served as our compass through every type of change.  Matters of war and peace are no different.  Americans are deeply ambivalent about war, but having fought for our independence, we know a price must be paid for freedom.  From the Civil War to our struggle against fascism, on through the long twilight struggle of the Cold War, battlefields have changed and technology has evolved.  But our commitment to constitutional principles has weathered every war, and every war has come to an end” President Obama said.

President Obama discussed how the threat of terrorism has changed substantially since September 11, 2011, and explained his comprehensive strategy to meet these threats, as we wind down the war in Afghanistan.

Read his full remarks here or read a fact sheet about the President’s speech here.

President Obama Meets Young Israelis and Palestinians on Second Day of his Middle East Trip

President Barack Obama and President Mahmoud Abbas of the Palestinian Authority walk past an honor guard at the Mugata Presidential Compound in Ramallah, the West Bank. (Official White House Photo by Pete Souza)
President Barack Obama and President Mahmoud Abbas of the Palestinian Authority walk past an honor guard at the Mugata Presidential Compound in Ramallah, the West Bank. (Official White House Photo by Pete Souza)

President Obama was in the West Bank for the first time since 2008 on the second day of his visit to the Middle East, where he held meetings in Ramallah with Palestinian Authority President Abbas and Palestinian Authority Prime Minister Fayyad, and attended a cultural event at Al-Bireh Youth Center. President Obama, who was joined by Secretary of State John Kerry in his meetings, commended President Abbas and Prime Minister Fayyad for the progress that they’ve made in building the institutions of a Palestinian state.

“I’ve returned to the West Bank because the United States is deeply committed to the creation of an independent and sovereign state of Palestine,” President Obama said in a joint press conference with President Abbas. “Like people everywhere, Palestinians deserve a future of hope — that their rights will be respected, that tomorrow will be better than today and that they can give their children a life of dignity and opportunity. Put simply, Palestinians deserve a state of their own.”

In the interests of the Palestinian people, and also in the national security interest of Israel, the United States, and the world, President Obama reaffirmed “that the United States remains committed to realizing the vision of two states.”

We seek an independent, a viable and contiguous Palestinian state as the homeland of the Palestinian people, alongside the Jewish State of Israel — two nations enjoying self-determination, security and peace. As I have said many times, the only way to achieve that goal is through direct negotiations between Israelis and Palestinians themselves. There is no shortcut to a sustainable solution.

The President also spent time in Jerusalem today, this morning where he toured the Israel Museum and again in the afternoon, where he delivered remarks to the Israeli people from the Jerusalem International Convention Center. In his speech, President Obama spoke about the “unbreakable bonds of friendship” between Israel and the United States.

“Those ties began only 11 minutes after Israeli independence, when the United States was the first nation to recognize the State of Israel. As President Truman said in explaining his decision to recognize Israel, he said, “I believe it has a glorious future before it not just as another sovereign nation, but as an embodiment of the great ideals of our civilization.”  And since then, we’ve built a friendship that advances our shared interests.

“Together, we share a commitment to security for our citizens and the stability of the Middle East and North Africa. Together, we share a focus on advancing economic growth around the globe, and strengthening the middle class within our own countries. Together, we share a stake in the success of democracy.

“President Obama told the young people in the crowd that they would be the ones to shape our future, particularly on the three issues that will define our time — security, peace and prosperity. “And given the ties between our countries, I believe your future is bound to ours.”

“Israel is already a center for innovation that helps power the global economy,” he said. “And I believe that all of that potential for prosperity can be enhanced with greater security, enhanced with lasting peace.”

“Today, as we face the twilight of Israel’s founding generation, you — the young people of Israel– must now claim its future.  It falls to you to write the next chapter in the great story of this great nation. And as the President of a country that you can count on as your greatest friend, I am confident that you can help us find the promise in the days that lie ahead.”

The day ended with a dinner at the residence of President Peres in Jerusalem.