Obama Blocks Minimum Wages Increases In US Territory Because They Were Hurting The Economy
Recently a group of Democrats in Congress announced a push to increase the federal minimum wage by 35%. “Anyone who works hard and plays by the rules should not live in poverty. Yet 47 million Americans now qualify as the working poor. Raising the minimum wage helps families make ends meet,” Rep. George Miller (D – CA) said of the effort.
The argument from Democrats is that raising the minimum wage helps the economy. But does it really? Conservatives argue that raising the minimum wage actually hurts the economy by inflating the price for labor. And we have a recent example to suggest that conservatives are right about this. In American Samoa, President Obama put a halt to a series of minimum wage increases that were hurting the local economy.
President Obama has signed into law legislation to freeze American Samoa’s minimum wage until 2015. The president signed the bill Thursday, which delays a 50-cent increase that would have gone into effect in September.
Minimum wage in American Samoa varies from $4.18 to $5.59 per hour, depending on the industry. The Fair Minimum Wage Act of 2007 provided for annual 50-cents per hour increases until the rate matched the rest of the U.S., where the minimum pay is $7.25 per hour.
Employers and a government financial report have suggested automatic increases were harming the U.S. territory’s economy.
What the minimum wage does is make it more expensive to hire people. So, faced with higher payroll expenses, business owners cut jobs.
Obama recognized this problem in American Samoa. Will he and his fellow Democrats recognize the problem the minimum wage presents in America?Tags: Barack Obama, econony, jobs, minimum wage