WEST MIFFLIN, Pa. (AP/WJLA) - President Barack Obama stood alongside Americans on the job Wednesday in a morning-after trip to promote his State of the Union proposals to boost personal finances of low-wage workers.
With much of the legislation in Congress stalled amid midterm politics, Obama said he would take what action he can with presidential powers. But he urged Congress to pass a minimum wage hike for more than the small number of federal contract workers he can help on his own. "It's time to give America a raise," Obama said.
About 12 hours after laying out his agenda before a joint session of Congress, Obama visited a Costco store in suburban Maryland to drive home the argument that businesses who pay higher wages can improve their bottom line. "I guarantee you if workers have a little more money in their pocket, they'll spend more at Costco," Obama said to applause from the workers surrounding him in blue and red vests.
Obama said entry-level Costco employees start at $11.50 an hour, with average wages more than $20 an hour before overtime. The current federal minimum wage is $7.25, but Obama wants Congress to raise it to $10.10.
"If you work hard, you should be able to pay your rent, buy your groceries, look after your kids," Obama said from inside the cavernous bulk warehouse, close to the produce section where consumers could buy large containers of green seedless grapes and plantains. He joked that he could use a 50-pound bag of dog food for Sunny and Bo and that he'd like an 80-inch flat screen for the Super Bowl.
On Tuesday evening's State of the Union address, Obama declared that the economy has been growing for four years, and corporate profits as well as stock prices have all soared -- however, wages and incomes of ordinary people haven't gone up in over a decade.
Outside, the call for more money was loud and clear:
"$7.25 -- no one can live on that, that's a little more than $15,000 a year; nobody can live on that, it's time to give America a raise," said protestor Jeremy Funk.
Meanwhile, critics are arguing an opposite result: a new burden on employers. If they are forced to pay their more, they’ll hire fewer employees, which will in turn actually hurt job creation.
The President’s next stop near Pittsburgh, where he signed a directive for the Treasury to create something called “My-Ra” -- which is similar to a Roth-IRA retirement account but with no minimum investment. It’s a way of helping low-income individuals start saving.
"For those of you who don't have a 401k, an IRA on the job, you can get started now, and in an emergency you can withdraw contributions without paying a penalty, so it's a pretty good deal," said the President.
But all of this action is getting plenty of negative reaction from those who say he is overstepping his boundaries:
"The problem with that is he's got a pen and a telephone, it's true, but we've got the Constitution," said Republican Rep. Tom Rice for South Carolina.
Obama plans to sign an executive order in the coming weeks setting a $10.10 minimum wage for workers on new federal contracts, part of his vow to take executive action in his final years in office and circumvent the Congress that has deadlocked on most legislation amid partisan rancor. Maryland's Democratic Gov. Martin O'Malley is pushing to raise the state's minimum wage to $10.10.
"Ultimately Congress does have to do its part to catch up to the rest of the country on this," Obama said.
Obama praised O'Malley's effort as Democrats intend to make the minimum wage hike a potent issue in a number of states with competitive governor's races this fall. One of the biggest fights could come in Pennsylvania, where GOP Gov. Tom Corbett is among the most vulnerable governors facing re-election and has signaled that he won't support raising the state's $7.25-an-hour minimum wage. Democrats are expected to make a similar push in states with incumbent Republicans like Florida, Michigan and Wisconsin.
Obama later traveled to a U.S. Steel Corp. plant near Pittsburgh to tout more action he plans to take without Congress. He's directing the Treasury to create a new savings program geared toward those whose employers don't offer retirement plans - about half of all U.S. workers, according to the White House.
The idea is to offer a "starter" account to let people start saving even if they can't afford the large initial investment often needed for a private, commercial retirement account. Savers can start with just $25, and could opt to have contributions of as low as $5 deducted automatically from their paychecks.
"We think this fills a space that, very importantly, we can do by our own authority," Treasury Secretary Jacob Lew told reporters aboard Air Force One en route to Pennsylvania. The idea is to encourage some of the millions of Americans who do not save for retirement to begin putting aside even small amounts of money. "When people start saving they get into the habit of saving," he said.
Dubbed "myRA," the program will operate like a Roth IRA, so contributions to the plan will be made with after-tax dollars. That means account-holders could withdraw the funds at any time without paying additional taxes. The funds would be backed by U.S. government debt, similar to a savings option available to federal employees.
Initially a pilot program, the accounts should be available through some employers by the end of 2014, the White House said. Investors can keep the accounts if they switch jobs or convert them into private accounts.
It's a tradition for presidents to travel after delivering their annual address to Congress, pitching grand legislative goals for the year ahead. Vice President Joe Biden amplified Obama's message with a round of television interviews and a speech at a community college in New York state.
On Thursday, Obama will visit a General Electric gas engines facility in Waukesha, Wis., not far from Milwaukee. He'll also speak at a high school in Nashville, Tenn.