Obama Throws Support Behind Minimum Wage Movement in Economy Speech

Barack Obama warned that a "relentless, decades-long trend" of growing inequality and social immobility posed a fundamental threat to the American dream on Wednesday, throwing his support behind a grassroots movement to address chronically low wages across the US.

Attempting to regain the political momentum after a calamitous two months in which his healthcare reforms were plagued by website failures, the president said reversing the growing gap between rich and poor was "the defining challenge of our time". 

In a speech delivered in one of the poorest areas of Washington DC, Obama said: “The combined trends of increased inequality and decreasing mobility pose a fundamental threat to the American dream, our way of life and what we stand for around the globe.” 

The federal minimum wage currently stands at $7.25 an hour, or about $15,000 a year. Obama renewed his call for it to be increased, and has already indicated he will back a Senate measure to increase the minimum statutory pay to $10.10. Republicans in the House oppose the measure, which they say would be harmful to business.

Obama delivered the remarks in Anacostia, one of the most deprived neighbourhoods in the capital, the day before hundreds of fast-food restaurant workers in more than a hundred US cities strike in a major demonstration over low pay. The speech was hosted by the Center for American Progress, a progressive policy thinktank.

The president specifically mentioned fast-food workers – alongside nurses and retail workers – in the speech, describing them as people who "work their tails off and are still living at or barely above poverty". 

"That’s why it’s well past the time to raise a minimum wage that, in real terms right now, is below where it was when Harry Truman was in office."

He added: "I’m going to keep pushing until we get a higher minimum wage for hardworking Americans across the entire country. It will be good for our economy. It will be good for our families."

Obama's call for an increase in the minimum wage was not new, and neither, he conceded, were his other proposals, such as investing further in the economic recovery, improving education and sustaining targeted social welfare programs.

It has become something of a signature of the president's speeches on the economy for him to deliver rousing remarks about the need to tackle entrenched inequality; critics argue he has proven far less effective at doing anything about it. 

Rather than focus on new initiatives, Obama pointed to the economic benefits of his healthcare law, passed three years ago. The White House believes it has turned a corner in the disastrous rollout of the new healthcare website.

In the kind of upbeat, almost victorious declaration that would have been unimaginable just a few days ago, when the White House was desperately grappling with the website failures, Obama quoted Martin Luther King to extol the virtues of the reforms.

"You know, Dr King once said: 'Of all the forms of inequality, injustice in health care is the most shocking and inhumane.' Well, not anymore," he said. 

"More people without insurance have gained insurance, more than 3 million young Americans who’ve been able to stay on their parents’ plan, the more than half a million Americans and counting who are poised to get coverage starting on January 1, some for the very first time." 

He added: "It is these numbers, not the ones in any poll, that will ultimately determine the fate of this law." Obama challenged Republicans to propose improvements to the healthcare law, or other efforts to tackle inequality. "You owe it to the American people to tell us what you are for," he said.

The White House is desperately trying to put Republicans on the back foot over the Affordable Care Act, in a sign of a more aggressive strategy from an administration that has come under sustained criticism since crucial parts of the law were introduced in October.

With his health secretary, Kathleen Sebelius, in the audience, Obama said the acknowledged the "admittedly poor execution" of the law since October, but insisted that people across America were now "signing up in droves" to new healthcare plans.

Sebelius, who has come under intensive criticism over the implementation of the healthcare act, sat beside attorney general Eric Holder and Obama's close economics advisor Valerie Jarrett in the town hall where Obama delivered his remarks, six miles from the White House. Around half of the children in Ward 8 live below the poverty line. Unemployment in the predominantly African American area stands at almost 20%. 

Obama told the audience that economic inequality could no longer be viewed as a "minority issue". He said the gap in test scores between rich and poor children was now "nearly twice" that between black and white students.

"The opportunity gap in American now is as much about class as it is about race, and that gap is growing," he said.