President Obama has four more years in the White House, and he has to fill them up somehow. Here, in no particular order, are three financial priorities he should focus on — some of which he had promised to take care of in his last term. (For Part 1 of this series, click here.)
1. Minimum Wage
When he campaigned for the presidency in 2008, Barack Obama promised to increase the minimum wage to $9.50 and “index it to inflation,” Politifact reports. And yet, the federal minimum wage is $7.25 an hour. Some states have higher minimums; they aren’t allowed to have a lower one.
Indexing the minimum to inflation is important. If the minimum wage had been indexed to inflation over the last 40 years, it would be up to $10.55. In real dollars, it is worth significantly less than it used to be and than it was intended to be.
According to Raise the Minimum Wage, a full-time minimum-wage worker cannot afford the rent on a two-bedroom apartment in any state in the union. 64 percent of minimum-wage workers are women.
It is vital to the working poor that Obama keep his promise to raise the minimum wage and to index it to inflation. He might even consider raising it higher than $9.50 so it is worth as much as it was 40 years ago.
2. Labor Unions
“The declining power of American labor unions — and the related rise in economic inequality — are among the most important stories of Obama’s first term,” writes In These Times. In addition to raising the minimum wage, Obama made another promise that might have countered these trends: the Employee Free Choice Act (EFCA). The EFCA would help unions gain bargaining rights.
Right now, if 30 percent of employees in a workplace sign a card supporting the union, they can hold an election to decide whether to unionize. Under the EFCA, if 50 percent of employees signed a card in support of the union, the workplace would automatically be unionized and the workers would gain collective bargaining rights. As a senator, Obama co-sponsored the Act, but during his presidency the EFCA died in a Republican filibuster. It is time for Obama to revive and champion it.
Obama promised another measure that would have helped slow the increase in economic inequality: banning the permanent replacement of striking workers. Without this protection, workers can’t “stand up for themselves without worrying about losing their livelihoods,” notes Politifact. If Obama doesn’t keep this promise, unions’ most important leverage — the threat of a strike — will remain severely weakened.
3. Social Security
Politicians fret about whether Social Security will run out of cash, but so far Obama and his colleagues in governance have failed to take one simple measure that would significantly increase the amount of money flowing into the Social Security fund.
Payroll taxes fund Social Security, but not all pay is taxed. Social Security taxes are taken out of the first $110,100 a worker earns in one year, according to CBS News. Any earnings after that are free and clear of Social Security withholding.
Obama promised to lift that cap so that earnings above $250,000 are also subject to taxation for Social Security. Senator Bernie Sanders introduced legislation to implement Obama’s idea, and said that the change would keep Social Security in the black for 75 more years. Alas, the Senator’s bill never became law. Obama has yet to make good on this promise.
There is much work to be done even after the President and Congress somehow pull themselves back from the looming “fiscal cliff.” President Obama will have our support if he takes measures to right some of the most pressing financial wrongs facing our nation and to get money into the pockets of those who need it most.