Obama hitting the road to sell minimum wage, savings proposals

By Jeff Mason

WASHINGTON, Jan 29 (Reuters) - President Barack Obama on Wednesday will highlight the theme of income disparity by visiting a Maryland big-box wholesaler and a steel plant in a depressed corner of Pennsylvania a day after launching a renewed push to raise the federal minimum wage.

In a symbolic trip hours after giving his annual State of the Union address, Obama will seek to raise momentum for his proposals to lift workers' incomes and make it easier for Americans to put money away for retirement.

Obama traditionally uses the day after his high-profile speech to advance his agenda and set the mood for the year.

This year's trip will also launch his efforts to help Democrats win seats in November's congressional elections by focusing on a popular theme that touches on the economy and income inequality.

Obama announced on Tuesday he would sign an executive order lifting the minimum wage for workers with new federal contracts to $10.10 and urged Congress to do the same for Americans nationwide. The current federal minimum wage is $7.25 an hour.

The speech drew immediate praise from members of his Democratic Party, many of whom started the year discouraged by the flawed rollout of his signature healthcare reform law last autumn.

"The increase in the minimum wage is a very powerful message. It resonates across the country," said Senator Ed Markey from Massachusetts. "I think this will really give some wind to this year's Obama agenda."

Republicans oppose a broad increase in the minimum wage, saying it could harm the economy. "When you raise the cost of something, you get less of it," House of Representatives Speaker John Boehner told a news conference on Tuesday.

After a year in which Obama's policy proposals largely failed to gain traction in a divided Congress, the president spelled out a more modest agenda in his speech on Tuesday night. He plans to highlight his proposals on a visit on Wednesday to a Costco store in Lanham, Maryland, on the outskirts of Washington.

"Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover," Obama said in his speech, giving a shout-out to the popular bulk retailer.

The White House says Costco and similar businesses have supported previous increases to the minimum wage because higher earnings for employees build a stronger work force and increase morale and profitability over the long run.


The push to raise wages for lower-income Americans is part of a Democratic effort to reinforce the image of Obama, whose poll numbers are low, as a hero of the middle class, much as he presented himself during the 2012 presidential campaign.

"Raising the minimum wage is not just a matter of fairness or a means of combating inequality; it is also needed to jumpstart our economy," the Center for American Progress, a liberal-leaning think tank, said in a statement.

"Increasing the minimum wage would put money in the pockets of workers, who are likely to spend that money immediately at businesses in their communities."

Obama will also promote his proposal to create a program to help Americans who do not have traditional IRAs or 401K retirement accounts to save money for retirement.

After his Costco stop, Obama will travel to a U.S. Steel plant in West Mifflin, Pennsylvania, where he will discuss his savings proposals.

Senior administration officials said the plant was an example of a place that offered very good retirement accounts.

Obama said in his speech he would direct the Treasury Department to create a savings bond-like instrument called MyRA, which would have a guaranteed return without risk of losing money.