By Mark Felsenthal
WASHINGTON, Feb 14 (Reuters) - President Barack Obama said
on Thursday that raising the minimum wage, as he has proposed,
might trim corporate profits, but he added that U.S. firms were
enjoying robust earnings and needed customers with money to
"It might have some modest impact on their profits," he said
in an on-line video question and answer session sponsored by
"But the fact of the matter is, if we're going to have a
society in which we've got broad-based prosperity, those same
businesses also have to worry about do those customers have
money in their pockets."
Corporate profits are at record highs, helped by increases
in U.S. worker productivity, Obama said. At the same time, wages
and income have remained stagnant, he added.
"There are a lot of countries that are competing very well -
some of our toughest competitors, countries like Germany for
example - who have seen greater wage and income growth," he
Laying out his second-term agenda in his State of the Union
speech on Tuesday, Obama asked Congress to raise the minimum
wage to $9 an hour from the current $7.25. The wage hike would
lift many workers out of poverty and at the same time boost
consumer spending, a key component of economic growth, Obama and
his aides have said.
A woman in the Google+ video session asked how raising the
minimum wage would affect her cost of living as companies raised
their prices to accommodate the need to pay workers more.
The president replied that companies could likely absorb
increases in the minimum wage, which last rose over stages
between 2006 and 2009, without being put out of business.
"Nobody's going to be getting rich on $9 an hour ... but it
could make the difference between whether they can afford to buy
groceries or whether or not they are going to a food bank,"
"And my suspicion is you'll still be able to get your
Starbucks," he said.
Some economists have criticized Obama's proposal, saying it
will hurt low-skilled workers by stifling hiring. It also faces
a big hurdle in the Republican-controlled House of
Representatives. Republicans have often - but not always -
opposed increases in the minimum wage.
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