President Barack Obama said on Thursday that raising the minimum wage, as he has proposed, might trim corporate profits, but he added that US firms were enjoying robust earnings and needed customers with money to spend.
“It might have some modest impact on their profits,” he said in an on-line video question and answer session sponsored by Google+.
“But the fact of the matter is, if we’re going to have a society in which we’ve got broad-based prosperity, those same businesses also have to worry about do those customers have money in their pockets.”
Corporate profits are at record highs, helped by increases in US worker productivity, Obama said. But, at the same time, wages and income have remained stagnant, he added.
A woman in the Google+ video session asked how raising the minimum wage would affect her cost of living as firms raised prices in response to wage hikes.
The president replied that companies could likely absorb increases in the minimum wage, without going out of business.
“Nobody’s going to be getting rich on $9 an hour ... but it could make the difference between whether they can afford to buy groceries or whether or not they are going to a food bank,” he said.