- Ruby Wallau/Daily
By Katie Burke, Managing Editor
Published April 2, 2014
Fifty years ago, former President Lyndon Johnson stood in Michigan Stadium and outlined his plan to create a “Great Society” in the United States. Wednesday, President Barack Obama stood in the Intramural Sports Building and rallied the crowd with his vision of “opportunity for all.”
Johnson told University graduates in his 1964 commencement address, “Your imagination, your initiative, and your indignation will determine whether we build a society where progress is the servant of our needs, or a society where old values and new visions are buried under unbridled growth.”
In front of a crowd of about 1,400 University students, faculty and Michigan legislators, Obama harkened back to Johnson’s vision.
“We want to make sure that no matter where you’re born, what circumstances, how you started out, what you look like, what your last name is, who you love — it doesn’t matter, you can succeed,” he said. “That’s what we believe.”
Obama’s 35-minute speech was filled with references to the University and Ann Arbor, from Nik Stauskas to Zingerman’s Delicatessen, but his most important relation to the state was the recent initiative of state legislators to raise the minimum wage.
“If you’re working, if you’re responsible, you should be able to pay the rent, pay the bills,” Obama said. “You’ve got more states and counties and cities that are working to raise the minimum wage as we speak. That includes your state legislators from Ann Arbor.”
State Reps. Jeff Irwin (D–Ann Arbor) and Adam Zemke (D–Ann Arbor), who both attended the event, co-sponsored State House Bill 4386 in March 2013, which proposes the state minimum wage be raised from $7.40 to $9 per hour.
“(Raising the minimum wage) puts more money into pockets, which will be put back into the economy,” Zemke said.
He added that Obama’s public presence has put significant weight behind gathering support.
“It’s important that he continues to speak about this around the country, to dispel false connotations or associations with raising the minimum wage,” Zemke said.
Obama has endorsed a proposed bill to raise the federal minimum wage from $7.25 to $10.10 per hour. On Feb. 12, he signed an executive order raising the minimum wage for federal government contractors to $10.10.
“It’s easy to remember,” he said in his address. “10-10. 10-10.”
One week earlier, the Congressional Budget Office released a report on the effects of a potential raise. It estimated that a raise to $10.10 per hour would increase the nation’s unemployment by 500,000 workers, or 0.3 percent, and 16.5 million workers would have higher earnings. However, just 19 percent of those earnings would go to families living below the poverty threshold.
Though a minority of the excess earnings would go to families in poverty, the CBO reported that such a raise would lift about 900,000 of the roughly 45 million people who are currently below the poverty threshold above it.
Many University students work part-time jobs, which often pay minimum wage, to supplement living and tuition costs; however, the average age of minimum-wage earners is 35.
Rep. Paul Ryan (R–Wisc.) introduced a budget Tuesday outlining Congressional Republicans’ plan to grow the economy by cutting spending by $5.1 trillion. Raising the federal minimum wage was not included in the plan.
“(Republicans) sincerely believe that if we give more tax breaks to a fortunate few and we invest less in the middle class and … do only what’s best for their bottom line without the responsibility to the rest of us, then somehow the economy will boom, and jobs and prosperity will trickle down to everybody,” Obama said.
In his speech, the president called on businesses to act as well, referencing Henry Ford’s famous wage-doubling initiative in his Michigan factory 100 years ago.
“Not only did it boost productivity, not only did it reduce turnover, not only did it make employees more loyal to the company, but it meant that the workers could afford to buy the cars that they were building,” Obama said.
Wallace Hopp, senior associate dean for faculty and research at the Ross School of Business, said this type of strategy is necessary for businesses to be successful.
“By paying high wages he not only attracted the best people, but held onto them … as a result he had very high levels of productivity,” Hopp said. “Ford was right when he said raising wages was the greatest cost-saving device he had come up with.”
He added that Costco, also referenced in the president’s remarks, is a modern example of this practice. The Center for Positive Organizations at Ross studies Costco and other models, and has repeatedly seen productive results coming from their higher wages.
Though the majority of Americans support raising the minimum wage, Hopp said there is opposition both from smaller businesses that depend on minimum-wage workers and from within Congress.
“One word: politics,” Hopp said. “If you believe that the free market is the right thing and can never fail, and any effort to regulate it is evil, then you oppose minimum wage laws because they are anti-free trade.”
Mike Traugott, professor of communication studies and political science, said Obama’s speech focused more on the equity issue of raising minimum wage rather than the economic argument.
“The president doesn’t talk about this in terms of jobs,” Traugott said. “He talks about it in terms of getting by.”
He noted that in front of a sympathetic audience, Obama referenced his vision for an Opportunity Society more frequently than his plans for the federal minimum wage.
Traugott said the president, now in his second term, is able to talk about social issues such as equity and gay marriage without fear of negative attack ads. He added that Obama may look to the Democratic nominee in 2016 election to carry on the fight.
One of Johnson’s first mentions of the “Great Society” came in front of a crowd of 85,000 in Ann Arbor. Half a century later, Obama stood in a smaller building down the street, in front of a smaller audience, but with the same call to action.
“We believe in opportunity for everybody,” Obama said. “More good jobs for everybody. More workers to fill those jobs. A world-class education for everybody. Hard work that pays off with wages you can live on and savings you can retire on and health care you can count on. That’s what ‘opportunity for all’ means.”