December 4th, 2013
12:20 PM ET
8 months ago

Obama says wage and income gap eroding American dream

Updated 1:41 p.m. ET, 12/4/2013

Washington (CNN) – The growing gap between rich and poor Americans is threatening the ideals the country was founded upon, President Barack Obama said in remarks Wednesday that appeared to signal a leftward turn in his economic agenda.

Making sure that the U.S. economy works for every working American is "the defining challenge of our time," Obama said in a speech at the Center for American Progress, a liberal think tank. He later said the "dangerous and growing" income and opportunity gap is jeopardizing the notion that if people work hard, they can get ahead.

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

To combat the chasm between haves and have-nots, Obama called for a hike in the federal minimum wage, saying an increase is a good step for families and the economy as a whole.

Democrats on Capitol Hill have pushed for an increase in the federal minimum wage, which currently stands at $7.25 an hour. A proposal would boost it to about $10, and the White House has said Obama supports such a measure.

On Wednesday, Obama also made a general push to simplify the tax code, provide more work training in high schools, and make it easier for Americans to save for retirement.

Those are notions Obama has presented before; however, by packaging them into a clear plan for the next three years, Obama seemed to be making a play to revive his core of liberal supporters, who over the past several months have weathered the disappointments of his health care rollout and allegations of NSA spying.

Obama took sharp aim at Republicans during his remarks, saying they had failed to present their own plans for pulling Americans out of poverty.

“If Republicans have concrete plans that will actually reduce inequality, build the middle class, provide more ladders of opportunity to the poor, let's hear them. I want to know what they are,” Obama said.

And he made a forceful call for lawmakers to extend emergency unemployment insurance by the end of the year, saying “Christmastime is no time for Congress to tell more than one million of these Americans” they’ve lost those benefits.

The speech came as public approval of Obama sinks to new lows. The botched rollout of HealthCare.gov, coupled with stories of people losing their health plans, has contributed to the drop, but more Americans also say they disapprove of the President's handling of the economy, five years after the downturn.

A CNN/ORC Poll taken in November showed 59% of respondents said things were going badly in the country today. Thirty-nine percent - a plurality - said economic conditions are getting worse.

While Wall Street indexes and corporate earnings have reached new highs, the situation for low and middle class Americans has largely remained dire, including a jobless rate that remains high and scores of people who have given up looking for work.

The current economy is “profoundly unequal,” Obama proclaimed on Wednesday.

“Growing inequality and lack of upward mobility that has jeopardized middle-class America's basic bargain, that if you work hard, you have a chance to get ahead,” Obama said. “I believe this is the defining challenge of our time, making sure our economy works for every working American.”

The problem of income disparity, and the fight for a higher minimum wage, have gained renewed attention in the past weeks - low wage fast food workers have staged one-day strikes across the country demanding higher paychecks, and protesters stood outside Wal-Marts and other box stores on Black Friday demanding employees be paid better.

Obama's remarks Wednesday took place at a theater and arts facility in Washington's Southeast quadrant, an area of the capital where incomes remain low and 45% of the population lives below the poverty line.


Filed under: Economy • President Obama • Washington D.C.
soundoff (397 Responses)
  1. Bill Dave's

    The gap is there because being poor, lazy , and on welfare is more attractive than working,

    I can understand not wanting tongi tinware, to support lazy politicians and welfare type.

    It is hard to weed a garden, but the garden will not produce mech food if the weeds take over

    December 4, 2013 10:51 am at 10:51 am |
  2. Jackson Squire

    @rs

    Gas was less than $2 a gallon because demand for oil during the worst part of the Great Recession was extremely low. President Obama took office during the worst of the recession. This is a phenomenon called supply and demand that anyone who actually paid attention in Economics class in high school would know. Demand goes down and so does the price. It's simple economics. Now if you look at the $4.50 a gallon gas was prior to the recession and now then there's a difference there with its being lower today.

    I really wish you people would stop using less than $2 gas as an albatross. We're never going back to less than $2 gas again unless another recession forces demand to dwindle. The longer the recession that forces demand to dwindle comes along the less likely it'll be less than $2 gas because of inflation. The dollar will naturally inflate in a productive economy so the likelihood of $2 gas again goes lower with every passing year.

    If you take inflation into account we're not paying the least amount for it than we ever have. That prize goes to the late 1990's, but we're on the low end of the spectrum. We also pay the least for gas than any first world country in the world. We're producing more of our gas than ever before. I don't know exactly what you want here? Do you really want another recession to occur that causes $2 gas again?

    One dollar gas is gone and over with. Get over it.

    December 4, 2013 10:51 am at 10:51 am |
  3. Andrea Mason

    Again, we should be eternally grateful to have a " Golden Rule/ promises made- promise/ kept/ Matthew 25: 31-46/ and they said it couldn't be done/ but for the grace and mercy of God there go I and my family kind of President who is driven by his caring spirit for this nation and world as we continue to see him live out his desire to answer the call to action of our former beloved President Kennedy who, again, echoed the great words of " Ask not what your country can do for you but what you can do for your country!

    December 4, 2013 10:52 am at 10:52 am |
  4. Sniffit

    In the GOP/Teatroll randian utopia you'd be living on a corporate plantation and your gracious, beneficent employer would simply provide you with your housing on the corporation's campus, would simply provide the food and clothing it deems you need, educate your children just enough that they can take up your rake...I mean laptop...when you retire, and keep whatever is left over as profits to be distributed to the corporation's officer and ownership. You'll have everything you need, so what right could you possibly have to complain?

    Did I say campus? I meant plantation.

    December 4, 2013 10:52 am at 10:52 am |
  5. grichard1956

    ...and who's policies are causing this gap between the poor and rich to grow?

    December 4, 2013 10:52 am at 10:52 am |
  6. Greenspam

    Any economist will tell you that artificial creating a floor will actually hurt the number of jobs available. It's basic supply and demand. Let the market place decide what the minimum wage should be.

    December 4, 2013 10:52 am at 10:52 am |
  7. KR

    Can we raise minimum wage for servers/waitress' as well??? $2.65 an hour just doesn't cut it especially since most the time people do not know how to tip properly.

    December 4, 2013 10:52 am at 10:52 am |
  8. rs

    Sl 500 AMG

    Yeah raise the min wage, it is not going to do a bit of good.....$10 @ 40 hrs/wk = 400 a wk cant live on that!
    $11 @ 40 hr /wk =440 a wk, can't live on that! $12 hr @ 40hr/wk = $480 a week and all this is before taxes and your now required health ins. payment, add in a car payment and some food and there goes your big increase.....Go to school get a degree in something that matters and get a real job.
    _________________________
    So, by your logic people are better off trying to live on $725 and hour? Really? Sorry to burst your bubble, but for many their minimum wage paying job IS their "real" job. Here's another clue: if you can't live on $400 a week, you can't go to college on it.

    December 4, 2013 10:53 am at 10:53 am |
  9. BostonFred

    I think the minimum wage should be increased and it indexed to inflation. But that would take it out of the political theatre and eliminate it as a club the GOP and DEMS bash each other with.

    What would really help is having less people compete for jobs. That is only going to happen if the politicians vote to reduce overall immigration levels from the insanely high 1.8 million a year we currently have.

    Labor costs follow the law of supply and demand and if you want a healthy middle class again the best way to increase wages is limit the labor pool.

    Reducing immigration to zero and then tying it to future E-6 unemployment rates would help enormously. Have 5% unemployment – 0 immigration needed.

    Have 4.9% unemployment – let 100,000 people per year into the country. 4.8% – 200,000 per year.

    No H-1B's, no L-1 – no work visas of any sort. With some 30M Americans out of work/looking we don't need to compete with foreign labor.

    December 4, 2013 10:53 am at 10:53 am |
  10. Business owner

    I own a small business that employs 95-100 people. A change in wage of $2.75/hour will cost a company $5,720 per year per person. Multiply that by 100 employees. Total impact to the company is $572,000 plus the increase in payroll tax, plus the increase in Workers Compensation insurance. Does everyone think business owners make millions? Majority of business owners are just getting buy like everyone else. Except they have everything at risk. House & Car.
    It is easy to talk about the giants in the country. This country is built on company's like mine. We are the ones that go bankrupt trying to compete with Mexico/China/India.

    December 4, 2013 10:54 am at 10:54 am |
  11. Carlos

    RS Wrote
    "Remind me again, the Republican House has passed how many jobs bills?
    Once again- the Right whines- but offers no solutions for the recovery from the Bush Crash of '08."
    ----------------------------------------------------–
    Actually the House has passed on several legislation proposal which get turn down in the Senate. Second you forget to mention that the Crash in 2008 was a global crisis not a just a US and there were many factors such as the housing market which was created under the Clinton era under the good intentions everyone should afford a home and the deregulation of the banking industry. So yes there was bad policy from Clinton and Bush and are seeing bad policy under Obama as well.

    December 4, 2013 10:54 am at 10:54 am |
  12. FidyCents

    Time to move the headlines to another worthless story like this. Still the fact remains the number of welfare receipts during this administration has skyrocketed.

    December 4, 2013 10:54 am at 10:54 am |
  13. Bill Dave's

    It is hard to grow a decent garden full of weeds,

    Till welfare is less attractive, it will continue to go, and fruitful workers will decline in numbers

    December 4, 2013 10:54 am at 10:54 am |
  14. Rudy NYC

    Jolat

    Did they ever think for a single minute that maybe the reason the economy is still struggling is because obama's policies are bad? What economic experience does he have? ZERO
    ------------------–
    Considering how Obama's economic policies have mostly been a rigth wing imposed extension and continuation of Bush's tax policies, you might have point, just not the one you're trying to make.

    December 4, 2013 10:54 am at 10:54 am |
  15. rs

    Jason

    Great move Obama.....if you want more unemployed and dependent on the Governments handouts. The profit margin on many fast food places, will force them to cut labor....... or you're $5.99 combo turns into a $8.99 combo.
    ________________________
    And yet those burger selling corporations are making record profits, and pay virtually no taxes.... there is something very wrong with that.

    December 4, 2013 10:54 am at 10:54 am |
  16. Seth A Drekin

    This is a pretty simple problem to fix. Most people would say tie Minimum Wage to the rate of Inflation, but that would, in the short term, cause rapid inflation. All you really have to do is tie Minimum Wage to a States Poverty Level. This would not just help to allow workers to afford to live, but it would also force states to implement checks and balances on the cost of food and shelter. States that are able to keep living expenses low enough to keep the Poverty down would be allowed to have a lower minimum wage which would in turn encourage more businesses to move to that state.

    Of course we would need a specific federal standard on how to calculate the poverty level.

    December 4, 2013 10:54 am at 10:54 am |
  17. Kal

    Raising the minimum wage will only serve to increase the cost of the service/good being produced at that minimum wage job. That cost will be passed on to the consumer, who will likely spend less/take their business elsewhere. And for all those insisting it is some conservative derp salad, who owns the Department of Education? DEMOCRATS, created by Jimmy Carter. Government interference in the economy is the reason things are so bad now, BOTH PARTIES are equally guilty, of catering to their Wall Street cronies, and screwing over the average American worker. As for that imbecile who says gas was 4 bucks a gallon under Bush, nice try at rewriting history, professor. DEMOCRATS campaigned for Congress in 2006 on a promise to do something about gas at 2 dollars a gallon. And do something they did, they doubled it by 2008, and while it dipped in early 2009, I saw plenty of 3.95 a gallon gas across the nation all through out 2010-2013.

    December 4, 2013 10:55 am at 10:55 am |
  18. Malory Archer

    Here's a thought, stop the H1B visa program for all but the most specialized jobs. I went to a high end department store last week to buy a dress for my husband's Christmas party, and EVERY SINGLE employee in the dress department and the ladies' and mens' shoe department was from a former east block nation. It was that way when my daughter worked in the hospitality industry 5+ years ago. There are plenty of Americans willing to sell high end dresses and shoes, or to work room service, and staff restaraunts and banquet halls, but they're getting passed over for those jobs and nobody seems to notice or care. Is it because the workers taking those jobs "look like us"?

    December 4, 2013 10:55 am at 10:55 am |
  19. rs

    States have raised minimum wages, so have cities- yet their economies have improved.

    December 4, 2013 10:56 am at 10:56 am |
  20. ora pike

    interested he is still going after votes--he lied how many times about libya??? obamacare???? now kerry is telling us that the reason obama made a deal with the devil Iran is they increased their enrichment of uranium under bush--TRUTH IS UNDER OBAMA IRAN INCREASED THEIR CENTRiFUGES 14,000 WHICH IS A 400% INCREASE-LIED TO AGAIN. He has caused millions to lose their health insurance now he will help the unemployment just to look good and distract from obamacare to raise his numbers in the polls that show only 37% approve of his mismanagement and lies. NOBODY TOLD ME is still his biggest lie.

    December 4, 2013 10:56 am at 10:56 am |
  21. Carlos

    RS Wrote

    Which party has twice in two years shutdown the government and voted to default the governments financial obligations (essentially to crash the economy)?
    Why, I believe that was the GOP. Get a clue.
    -----------------------------------------------------
    Historically the government has been shut down 18 times. 3 by the GOP and 15 by the Dems. Interesting fact don't you think :)

    December 4, 2013 10:56 am at 10:56 am |
  22. Dana Abbott

    I keep seeing where people say that business owners are greedy. Ok, we pay a good wage, cover all medical and dental insurance and offer other good benefits. We work 60 hours a week, take all of the risk, and are the first to take a pay cut if profits decline. So we are greedy?

    December 4, 2013 10:57 am at 10:57 am |
  23. JohnRJohnson

    EVERY TIME there has been a move to raise the minimum wage, the same reasons not to do it are dug up, polished and put on display. NONE of the gloom & doom forecasts put forth by people who oppose minimum wage increases has EVER come to pass. There is simply no evidence that it results in lay-offs or that it hurts the middle class. There is, HOWEVER, a mountain of evidence that it helps lift people out of poverty by giving them something that is a little closer to a living wage. The companies that oppose this are large, extremely profitable corporations that depend on cheap labor - Walmart, McDonald's, Home Depot, etc. The executives of these companies suck the profits out of them, then wine about any attempt to improve the lot of their employees, most of whom are living below the poverty line. The BOTTOM LINE is that an increased minimum wage would put a lot more money into the economy, which would have the effect of stimulating hiring, not firing.

    December 4, 2013 10:57 am at 10:57 am |
  24. Sniffit

    "The profit margin on many fast food places, will force them to cut labor"

    Then perhaps they shouldn't have built their entire business model on the foundation of being able to pay people so little that they can't survive on it. Ever heard of the virtuous cycle? Look it up.

    December 4, 2013 10:57 am at 10:57 am |
  25. James

    At least min. wage is holding steady. While middle class wage is dropping. I see a problem here. You raise Min wage and middle class wages drops more. And soon the two shall meet. So why should the middle class try to improve themselfs? All this in truth does is raise the tax rate so the Government takes in a little more. Add the tax, extra cost, and all together. The rich need to maintain there 7% a year of the top. So the more it cost the more they make. And it adds up to you loose again.

    December 4, 2013 10:58 am at 10:58 am |
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