December 4th, 2013
12:20 PM ET
11 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. Sniffit

    "Maybe your buddy in your "gang", The Real TP, can bring up a post from me again from almost a month ago. That appears to be his M-O."

    Hey now, to be fair, you've repeatedly tried to do that to me. Turnabout is fair play.

    December 4, 2013 11:26 am at 11:26 am |
  2. A True Conservative

    So the government gets to decide what a fair wage is for a job....they also get to decide when someone makes "too much" money......does this concern anyone elses besides me? I thought that I was responsible for providing enough value for my employer to earn what I consider to be an adequate salary....and if I don't earn what I consider to be enough I will improve my skill set or look for another employer......

    December 4, 2013 11:27 am at 11:27 am |
  3. Rudy NYC

    tom l.

    Maybe your buddy in your "gang", The Real TP, can bring up a post from me again from almost a month ago. That appears to be his M-O. So, Real TP, since you are so much better than me, morally and intellectually, are you ever gonna call Rudy on his lies about me? Since it's apparently my job to police the conservative posters, shouldn't it be your job to police the liberal ones?
    ------------------------
    I believe it to the truth that you are "just a few years out of high school", which by definition means I could be wrong about you, but it doesn't make me a liar. We have only your word that I "lied" about you. Your credibility around here is pretty low, especially in light of the fact that just *yesterday* you tell us that you work in the financial industry, and today you call me a liar for repeating it because you no longer work in the industtry. I stand by posts. You're nothing more than a kid in his mid-20s. Your obvious immaturity shows up in most everything that you post. End transmission.

    December 4, 2013 11:27 am at 11:27 am |
  4. Thomas

    @bubba
    I saw some people arguing about gas prices.

    When Bush left office the average price was $1.569

    ====

    Thank you for reminding me what it was like when GW Bush left office .
    When Bush came to power, the country had a surplus of $300 billion. ... We entered the largest economic and financial crisis ever, which caused the market to crash followed by a recession .
    When Bush left office, the Dow was at 7949 ,

    December 4, 2013 11:28 am at 11:28 am |
  5. L

    It's pretty interesting how idiotic most people are; supporting either the GOP or the Dumbocrats since deep down you all know both parties are inept.
    That said, no one should expect to have a nice house and white picket fence whilst working at McDonald's. This is incredibly stupid. Most people with half a brain know that the downfall of the middle class is largely due to the disappearance of decent paying manufacturing jobs. Now you can argue until the cows come home whether that was due to unions pushing for high wages which made the company unable to compete or whether it was due to Clinton bringing China into the WTO or whether it was big corporations moving their manufacturing off shore to slash costs or whether it was all of those put together.

    Point is, unless Americans can unite instead of bickering over party doctrine , the future is destined to remain much the same as the present, or worse.

    December 4, 2013 11:28 am at 11:28 am |
  6. Jamming With Edward

    @Hank. Any business that has to do with food has low profit margins. That's always been the case. I can spend $10 at McDonald's and it's just a snack, hardly a meal. The fact is many adults work minimum wage jobs because that's all that's available. Fast food work or any retail / service job can be very hard. The customers can often be brutal and the work very stressful. Convenience stores that make 60% of their profit from cigarettes and even more with beer and liquor added in can easily afford to pay $10 an hour. Fast food restaurants often hire adults over teens because they have a better work ethic.

    December 4, 2013 11:29 am at 11:29 am |
  7. Huh?

    How does so much ignorance keep spewing from so many commentators? Hank I'm not sure who told you the fast food industry is low profit, but It must have been one of the incredibly numerous multiple franchise holders making a huge killing off the backs of his/her grossly overpaid workers. That's why there are so few fast food franchises around because they just can't make any 'real' profits. Huh?

    December 4, 2013 11:30 am at 11:30 am |
  8. Middle Road

    The problem is that too many in our country believe that good paying jobs will come if we just lower tax rates. That obviously hasn't happened because income inequality has grown by leaps and bounds since Reagan dropped the tax rates and the spread between the rich and poor started to accelerate.

    If we model other countries, like Germany, which have strong apprenticeship programs which get govt backing and then *require* those companies to hire so many apprentices a year, we could start increasing our skilled labor force. Today, the spread between CEO pay and lowest worker pay has gone from about 15-20 up to 200-500. Most of this increase happened after we lowered the top tax rates.

    December 4, 2013 11:30 am at 11:30 am |
  9. Kenneth Krieger

    Obama instead of creating jobs, wants to raise the minimum wage to create fewer jobs and divert attention from his lousy health care bill that doesn't work. I also noticed that. CNN is running more truthful stories about the lies Obama tells. I knew four years ago that Obama was a liar. What took CNN so long.
    Kenneth Krieger Cape oral, Florida

    December 4, 2013 11:30 am at 11:30 am |
  10. Sniffit

    Hank, you're way off base. Franchisee or not, the franchise contracts and the entire business model upon which they are based, are entirely controlled and dictated by the main corporate entity, and the business model has as its keystone the idea that a profit can be made by selling cheap, horrible products while paying employees wages that are insufficient for meeting even the most basic of needs. What needs to be understood and accepted is that those business models are economic cancer. You cut the cancer OUT. If, in the short-term, such businesses cannot adjust and adapt their business models to turning a profit while paying their employees fair and decent humane wages, THEN THEY SHOULD NEVER HAVE EXISTED IN THE FIRST PLACE. They are a cancer, parasites. Culling them will make the economy, and our society, healthier in the long-term, even if there must be some pain in the short term.

    December 4, 2013 11:32 am at 11:32 am |
  11. Carlos

    Malory Archer Wrote

    Howsabout you provide some perspective into those shutdowns instead of just tossing out numbers. For starters, how many times have the dems shut down the government simply because they were having a temper tantrum because they wanted to damage the President, or they didn't "get their way"?
    -----------------------------------------------------

    Between 1977 & 1979 the Dems shut down government when Dems controlled both the House and Senate and oh by the way Carter was President a Dem! Talk about shutting down the government just to shut it down...even when they had control of both Congress and the White house the dems needed to shut it down...yeah how about that for having a tantrum

    December 4, 2013 11:32 am at 11:32 am |
  12. Hopeless Fool

    Ratings are falling. Quick, try to buy some votes from the poor people by increasing minimum wage. Sad that the increased wage costs cause employers to lay off or not hire those same poor people.

    December 4, 2013 11:33 am at 11:33 am |
  13. Rudy NYC

    Jackson Squire wrote:

    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.
    ----------------------
    Actually, it was more than just low demand. The supply stayed at pre-Crisis levels because so many investors had purchased oil futures, which committed them to buying the oil, which created a glut on the global market, which further drove the price of a barrel of oil down. It was the perfect storm to cut the price of a gallon of oil and gasoline by nearly 2/3.

    December 4, 2013 11:33 am at 11:33 am |
  14. Al

    What is the outcome of this. First of all the cost of products will go up, that means that it will now once again take more money to pay for the product or service. Next the argument will once again be brought up that higher wages are wanted to live on.

    This is still a capitalistic country and it has worked for those willing to go to school, learn a trade and work, I know bad word for some. People have made it in life and have managed to furnish for their family. It's time to get away from the handout country, and make it once again work for what you want.

    December 4, 2013 11:35 am at 11:35 am |
  15. Deez

    When people earn a living wage, they are less dependent on social benefits (welfare).

    It's in some companies business plan (Walmart, McDonalds, etc.) to tell their employees to supplement their income with welfare, while fighting to keep the minimum wage low for their own bottom line.

    Wake up GOP!

    December 4, 2013 11:35 am at 11:35 am |
  16. The Real Tom Paine

    -Rudy NYC

    tom l.

    Maybe your buddy in your "gang", The Real TP, can bring up a post from me again from almost a month ago. That appears to be his M-O. So, Real TP, since you are so much better than me, morally and intellectually, are you ever gonna call Rudy on his lies about me? Since it's apparently my job to police the conservative posters, shouldn't it be your job to police the liberal ones?
    --------
    I believe it to the truth that you are "just a few years out of high school", which by definition means I could be wrong about you, but it doesn't make me a liar. We have only your word that I "lied" about you. Your credibility around here is pretty low, especially in light of the fact that just *yesterday* you tell us that you work in the financial industry, and today you call me a liar for repeating it because you no longer work in the industtry. I stand by posts. You're nothing more than a kid in his mid-20s. Your obvious immaturity shows up in most everything that you post. End transmission.
    *******************
    Rudy, can you recall any time in the years I have been posting on here that I suggest we coordinate our efforts? Have you agreed with everything I have said, or have I demanded that you agree? I must be getting old, since I can't recall those conversations. Oh, do you want to go out tagging tonight?

    December 4, 2013 11:36 am at 11:36 am |
  17. tom l

    I believe it to the truth that you are "just a few years out of high school", which by definition means I could be wrong about you, but it doesn't make me a liar. We have only your word that I "lied" about you. Your credibility around here is pretty low, especially in light of the fact that just *yesterday* you tell us that you work in the financial industry, and today you call me a liar for repeating it because you no longer work in the industtry. I stand by posts. You're nothing more than a kid in his mid-20s. Your obvious immaturity shows up in most everything that you post. End transmission.

    =====

    I said I worked in the financial industry 13 years ago for 10 years. I no longer work in the financial industry but you said that I do. Once again you have misread what I wrote. You also claimed that I said I was just out of high school and I never said that. It is you who makes things up. I find it hysterical that you say that I write like a child with people in your "gang" using terms like teapublicans, or teaklans or teatrolls. Yeah, those are the words that an adult would use. Such powerful arguments that you guys make. It's laughable. I'm impressed that you can stand by something you know nothing about. Have you ever met me? Have we talked? Or have we just exchanged posts here? So, let me inform you again that I am not just out of high school and I have been working for over 20 years. But live in your little bubble.

    December 4, 2013 11:37 am at 11:37 am |
  18. Hal

    In my business, my employees cost me about 40% more than their salary. I pay roughly 14 dollars per hour, but it actually costs me around 20 dollars per hour (because of federal, state taxes workman's comp vacations etc) Most people are not aware of the actual costs to have an employee.

    December 4, 2013 11:38 am at 11:38 am |
  19. tom l

    @Sniffit
    ""Maybe your buddy in your "gang", The Real TP, can bring up a post from me again from almost a month ago. That appears to be his M-O."

    Hey now, to be fair, you've repeatedly tried to do that to me. Turnabout is fair play."

    ========

    Fair statement but he continues to go back to one singular post I made on Veterans Day in which I said something that was inappropriate and then apologized for. But the fact that he still brings that one singular post up is what compelled me to write that.

    December 4, 2013 11:39 am at 11:39 am |
  20. sonny chapman

    Attention Conservative "Christians": What do you think Pope Francis would feel about this subject ? More importantly, WWJD ? Even Ronald Reagen recognized the importance of FED. GOVT. Policies that encourage the Poor to WORK. Earned Income Credit(now used by Fox & Romney to castigate the Working Poor as Tax Freeloaders even though they pay through the nose in Local & State Taxes & FEES).

    December 4, 2013 11:39 am at 11:39 am |
  21. Silence DoGood

    @ true conservative " I thought that I was responsible for providing enough value for my employer to earn what I consider to be an adequate salary....and if I don't earn what I consider to be enough I will improve my skill set or look for another employer......"

    ..and the football team will win if they play hard enough and have heart. Dude – you are living in a Disney movie. Corporate America, when it has a strangle hold like Walmart, does not a care WHAT you do or know or love or have skills for. I have known amazing skilled well paid people laid off for no reason other than corporate greed. There is no Disney fair play and competition. Corporations already tell us instead of the government when we make too much. They had their chance – they have themselves to blame for regulation.

    December 4, 2013 11:49 am at 11:49 am |
  22. stingerhp

    When the minimum wage goes up, the cost of goods go up.. Simple, the fact is that the employer cannot pay higher wages so they pass that along to the consumer.. Never ending battle..

    December 4, 2013 11:52 am at 11:52 am |
  23. Rudy NYC

    tom l. posted today:

    I said I worked in the financial industry 13 years ago for 10 years. I no longer work in the financial industry but you said that I do. Once again you have misread what I wrote. You also claimed that I said I was just out of high school and I never said that. It is you who makes things up.
    -------------------------------
    Yesterday, little tom posted the following.

    "tom l.

    Um, I will not call you a liar. But you are sorely mistaken. I was born in 1969, graduated high school in 1987, UC Irvine in 1992 (had to take the 5 year plan), worked in the financial industry for 10 years and now have been in marketing/advertising for almost 13 years. Why would you flat out make something up? Well, I guess that's nothing new for you. You do it all the time."

    Notice the keyword in the middle of everything. "now" He does this all the time, folks. Posts stuff, and then completely forgets about what it was he posted. I'm a liar because I repeat what tom posts.

    December 4, 2013 11:57 am at 11:57 am |
  24. Sl 500 AMG

    @ rs
    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.

    I did not say they would be better off, I was implying you would have to raise the min wage to a number that no company would be willing to pay for low skill workers. And you can go to college on it, its called student loans. I went to school on them and got a masters degree. And the fact that there are so many people stuck at that wage is troubling, but what skills do they bring to the table? How much work experience do they have? Are they hard workers or just lazy and expect a job to be given to them? I would not expect to paid the amount that i make without some formal education, for people out there to think that a person working the counter at a fast food place deserves 15 an hr.....CRAZY!

    December 4, 2013 12:02 pm at 12:02 pm |
  25. Ol' Yeller

    @tom I
    "Fair statement but he continues to go back to one singular post I made on Veterans Day in which I said something that was inappropriate and then apologized for..."

    Well, isn't that what you do on here ALL the time? The President apologised and took accountablity for his error by saying everyone could keep their insurance, but you and your ilk hammer away daily about it. I'll bet rancid prebius said it 604 times during Crossfire yesterday.... I thought that would be a god match up, but all he did was repeat that over and over and over again.
    You don't like it when your tactics are used against it (please don't start playiong the vicitim guys, some tactics are just pi ss an t).
    Live by the sword, die by the sword....

    December 4, 2013 12:04 pm at 12:04 pm |
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