• Dec. 8, 2016, 9:52 pm

Economy is resilient but Americans still need a raise, says US labor secretary

Powered by Guardian.co.ukThis article titled “Economy is resilient but Americans still need a raise, says US labor secretary” was written by Jana Kasperkevic in New York, for theguardian.com on Saturday 9th January 2016 16.39 UTC

The US may have seen its two best years of job growth since the late 90s, but according to the labor secretary, Tom Perez, the American people still need a raise.

The last time the federal minimum wage went up was in July 2009. It has stayed at $7.25, even as Barack Obama has called on Congress to raise it to $10.10 and then $12 an hour.

Perez said on Friday the minimum wage was “on the front burner and it’s sizzling, for us, because Americans need a raise”.

In 2015, wages increased by 2.5%. In order for the lowest-earning Americans to feel the impact, that rate of growth would have to be between 3% and 4%.

The Obama administration and the Federal Reserve both expect the job market to continue to strengthen. According to Perez, as unemployment goes down companies will have to raise wages to attract the best candidates.

“And on a federal level, one of two things will happen,” he told the Guardian, after his department announced that the US economy had added 292,000 jobs in December, exceeding expectations. “We will see a raise in minimum wage this year and we are going to continue to fight for that. Or those who oppose it will do it at their own peril.

“I have been to red states and blue states and what they all have in common is that you cannot live on $7.25 an hour. That’s why you are seeing states like South Dakota and Nebraska raise their minimum wage. And you shouldn’t have to win the geographic lottery to get out of poverty wages.”

The Republican stance on minimum wages came back into the spotlight in late December, when presidential frontrunner Donald Trump appeared to change his position.

“Wages in are [sic] country are too low, good jobs are too few, and people have lost faith in our leaders. We need smart and strong leadership now!” Trump tweeted on 28 December, weeks after the fourth Republican debate, in which he said that wages were too high and that the minimum wage should remain at $7.25.

Asked if the economy would feature in Obama’s final State of the Union speech on Tuesday, Perez said: “Of course.

“The economy continues to be job one at the Labor Department. And the president, every day, is waking up asking the questions: how can I build not just a better economy, but a better America where we have shared prosperity?”

Some remain skeptical about whether strong job growth can continue, after the US economy added 2.65m jobs in 2015.

Some economists attributed the better-than-expected December report to the warm weather. Perez dismissed that, saying much of the growth had been in sectors with indoor jobs.

“The sectors that have done best are business and professional services and education and health,” he said. “Now, my kid’s teachers teach indoors. My accountant doesn’t work in her backyard.

“The broad-base nature of our growth right now is a really solid indicator that we are building an economy that can remain strong and resilient and resistant to weather headwinds or China headwinds. We have proven that we are incredibly resilient in this country.”

US stock markets have not proved resilient to economic turmoil in China. On 4 January, the markets opened with their worst performance since 2008, and both the Dow Jones and the S&P 500 went on to have their worst opening week in history.

By Friday, the Dow Jones was down 6.2% and the S&P 500 was down 6%. Nasdaq had its worst opening week since 2008, losing 8%.

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