* Small businesses push back on $9/hr minimum wage
* Energy plan makes no mention of electric vehicles
By Ben Berkowitz
Feb 12 President Barack Obama's call for a
renaissance in American manufacturing could lead to new jobs
down the road, but his push to increase the minimum wage now
could be a harder fight, with retail groups and small businesses
opposed to the extra cost.
The president used Tuesday night's State of the Union
address to lay out a plan to bring manufacturing jobs back to
the country, including a network of institutes that would teach
new industrial skills.
In an effort to make his point that it can be done, Obama
mentioned Apple Inc, whose chief executive, Tim Cook,
attended the speech, and which has already pledged to move some
Mac computer manufacturing back to the United States from China.
He also acknowledged companies such as Caterpillar, Ford
and Intel for doing the same.
But even the staunchest supporters of American manufacturing
dismissed what they say amounted to token gestures that will not
make a real dent in the employment picture.
"Fact check on Apple bringing jobs back to US cited (in the
speech): Tim Cook is investing only a ROUNDING ERROR of Apple's
market cap in the US," Scott Paul, president of the Alliance for
American Manufacturing, said on Twitter.
Apple said last year it would move some production of its
Macintosh computers back to the United States, though it did not
say which products or how much production, and it did not
include iPads or iPhones in the effort.
Either way, though, investors said they supported the
message: American workers need skills they currently lack and
the economy will not improve until that changes.
"Our nation needs to do more exporting," said Steve Westly,
a California venture capitalist, former state controller and
one-time senior eBay executive who co-chaired Obama's campaign
in the state. "We need to do a better job of retraining
Americans to get those jobs ... I think most people get that."
INFRASTRUCTURE AND ENERGY
One way or another, those projects will require labor, which
is where two other key elements of the speech came in:
immigration reform and a hike in the minimum wage to $9 an hour
from $7.25 an hour.
Obama made specific reference to changing the immigration
laws to encourage highly skilled engineers and entrepreneurs to
come to America and help expand the economy.
While Obama did not specifically speak to the issue of
expanding the so-called H-1B visas for skilled workers, business
leaders said his comments were still a good start.
"The President's remarks reflect the growing, bipartisan
support in Washington to improve our nation's access to top
international talent, as part of broader based immigration
reform," Paul Guzzi, president of the Greater Boston Chamber of
Commerce, said in a statement.
There may be broad support for immigration reform, but the
minimum wage hike is much more controversial. Last year the
holiday season saw protests against McDonald's and
Wal-Mart Stores over wages, part of broader union
efforts for higher worker pay.
"The minimum wage increase is more of a threat to small
companies rather than the larger companies, particularly in food
service," said JJ Kinahan, chief derivatives strategist at TD
Ameritrade, in an email interview.
"However, the bigger effect on these companies is the cost
of their goods - which are often processed by smaller
companies," raising their costs beyond what they can still pass
along to consumers, he said.
The National Small Business Association largely cheered the
president's speech but took issue with the wage proposal, which
it said "could be very problematic for segments of a struggling
The National Retail Federation, which has in the past pushed
for tax relief alongside minimum wage proposals, also questioned
the president's plan.
"A minimum wage hike right now would be one more factor
driving up costs for employers and creating headwinds for job
creation, especially among the small businesses that create most
of our nation's new jobs," David French, the federation's senior
vice president for government relations, said in a statement.
The president also used the speech to come back to a favored
theme: energy independence. While promising to speed new oil and
gas permits, the president also suggested capturing more of the
revenue they generate via an "Energy Security Trust," which
would fund research into alternate fuel sources for cars and
But he was non-committal on what that fuel might be - a nod,
perhaps, to the fact that the administration recently backed
away from a goal of having 1 million electric vehicles on the
road by 2015.
The president also nodded clearly at the uncertainty that
has gripped the country time and again in the last two years -
namely the debt ceiling fight in 2011 and the "fiscal cliff" in
late 2012. Critics appreciated Obama's call to end the bickering
but said more still needed to be done.
"Growth and job creation should absolutely be national
priorities. But saying so doesn't make it so. What's required is
action in Washington to create a better business environment,
and we need to stop lurching from crisis to crisis. If growth is
really the goal, the President and Congress should start with
actual budgets, legislation and debate," Business Roundtable
President John Engler said in a statement.