RSF Research and Obama’s Agenda to Tackle Inequality

February 6, 2014

In his State of the Union address on Tuesday, January 28, President Obama focused a significant portion of his speech on the issue of inequality in the U.S. Citing the expiration of unemployment insurance and a stagnant minimum wage as two major roadblocks to economic security for many Americans, the president outlined an ambitious plan to alleviate financial distress for low-income individuals, including raising the minimum wage. “Today the federal minimum wage is worth about twenty percent less than it was when Ronald Reagan first stood here,” Obama stated, introducing a bill to fix that would lift the minimum wage to $10.10. He continued, “This will help families. It will give businesses customers with more money to spend. It does not involve any new bureaucratic program.”

Newly published research from the Russell Sage Foundation sheds important new light on Obama’s plan of poverty relief. A new book, What Works for Workers?, examines the public policies that have already been developed to aid to low-income workers. In their chapter, “Low-Wage Workers and Paid Family Leave: The California Experience,” contributors Ruth Milkman and Eileen Appelbaum offer an analysis of California’s paid family leave program, a policy designed to benefit the working poor, who have few resources that allow them to take time off work to care for children or ill family members. Despite initial opposition, the paid leave program proved more acceptable than expected among employers and provided a much-needed system of wage replacement for low-income workers. In the wake of its success, the initiative has emerged as a useful blueprint for paid leave programs in other states. Though Obama did not propose a specific initiative for implementing paid leave for mothers, he acknowledged the importance of such programs, stating, “[Mothers] deserve to have a baby without sacrificing her job. A mother deserves a day off to care for a sick child or sick parent without running into hardship.”

Similarly, research by Stephanie Luce confirms the importance of raising the minimum wage, a crucial element of Obama’s stated legislative goals. She addresses living wage ordinances in her chapter, “Living Wages, Minimum Wages, and Low-Wage Workers” and shows that while living wage ordinances rarely lead to job losses (as some conservatives have speculated), they also have little impact on most low-wage workers. Luce argues that raising state and federal minimum wages, as Obama has proposed, and indexing them, would be a more effective way to cover a large number of low-income workers.

Closing the ever-widening income gap will require comprehensive antipoverty reforms, not just piecemeal interventions. The RSF book Legacies of the War on Poverty (2013), which addresses the lasting impact of President Johnson’s sweeping efforts to alleviate poverty in the 1960s, provides insight on what kinds of programs work. Johnson’s reforms were effective because they integrated education reforms, health care initiatives, and policies designed to address racial inequality, among other contributing factors to poverty. 50 years after the State of the Union address in which Johnson declared an “unconditional war on poverty,” Obama’s more recent remarks on inequality invite a new discussion and a new set of policies to bring much-needed relief to low-income workers and families.

To browse other RSF titles on social inequality, click here.

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