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Obama Proposes Raising Minimum Wage, Investing in Infrastructure Jobs

Reuters (02/12/13) Roberta Rampton; Jeff Mason

President Obama proposed in his State of the Union address to increase the minimum wage by more than 20%, invest $50 billion on crumbling roads and bridges, and spend $15 billion on a construction jobs program in a bid to boost economic growth. Obama called on Congress to support his plan, which would include tax and education reforms that the administration believes would help attract manufacturers back to the U.S.

The minimum wage increase would lift incomes for 15 million Americans and be done in stages. White House officials say the move to boost the wage to $9 an hour, from $7.25, is aimed at addressing poverty and helping low-income Americans. The officials say economic studies show increasing the minimum wage is effective at reducing poverty while reducing turnover costs for businesses. The proposal likely will be opposed by Republicans and business groups, which have traditionally said raising the minimum wage discourages companies from hiring low-skilled workers.