State of the Union

State of the Union: Will paid family leave and higher minimum wages really happen this year?

By Tina Irgang

In his last State of the Union address Jan. 12, President Barack Obama touched on a number of agenda items that would affect businesses if they are implemented before his departure. Among them are implementing paid family leave and raising the minimum wage.

“These things still matter to hardworking families. They’re still the right thing to do. And I won’t let up until they get done,” Obama said.

But what are the chances that they actually will get done?

Let’s start with the minimum wage. For a while now, the administration and Congressional Democrats have supported raising the federal minimum wage from $7.25 to $10.10 an hour. It’s a topic Obama has raised in previous State of the Union addresses, but so far, Congressional action has not been forthcoming. A Democratic proposal on the issue has been languishing since 2013, according to The Huffington Post.

However, that doesn’t mean there has been no movement on the issue. This month alone, more than a dozen states have raised their minimum wage, CNBC reports. Altogether, more than half of all states have minimum wages higher than the federal threshold.

A similar dynamic is in play when it comes to family leave. In the past year alone, several states have advanced proposals that would require such leave. In Washington, DC, the City Council late last year introduced a bill that would require almost every full-time and part-time worker in the city to receive 16 weeks of paid leave to take care of a newborn or a dying relative, The Washington Post reports. State government in New York is contemplating a 12-week proposal in this year’s legislative session, according to The New York Times.

“Though a national policy seems far-fetched in the current political climate, some policy makers are trying,” The Times goes on to say. “Senator Kirsten Gillibrand, a Democrat of New York, and Representative Rosa DeLauro, a Democrat of Connecticut, have introduced the Family Act, which would give Americans paid time off to care for babies or sick family members.” The benefit would be funded through employer and employee contributions of 0.2 percent of wages each, and would equal two-thirds of an individual’s monthly wages.

What’s more, it’s not far-fetched to say that paid leave is gaining traction on the national stage. Leading Democratic presidential candidates Hillary Clinton and Bernie Sanders have both put forward their own proposals but, perhaps more unusually, so has Republican candidate Marco Rubio. So federal movement on the issue of paid leave, while not likely to be immediate, doesn’t seem out of the question.

The bottom line: Given the general inaction in Congress over the past several years, there is unlikely to be much reform on any business-related issue in Obama’s final year in office. While he is no doubt aware of the steep odds for his agenda, Obama nevertheless sounded a generally hopeful note on Tuesday, emphasizing the “spirit of discovery” that has helped build America’s economy.

“This year, I plan to lift up the many businesses who’ve figured out that doing right by their workers or their customers or their communities ends up being good for their shareholders,” he said. “And I want to spread those best practices across America.”

Tina Irgang is the production editor for SmartCEO. Contact her at tina@smartceo.com.