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Obama: Higher wages needed

Annual report backs policies

WASHINGTON — President Barack Obama’s top economists say that even as the U.S. has managed to kick start a lasting and growing recovery, modest wage gains are far from making up for decades of paycheck stagnation for middle-class workers.

The White House, in its annual report to Congress, also warns that despite the U.S. relative economic strength, slowdowns abroad still pose dangers at home.

The 400-page “Economic Report of the President” is a largely bullish portrayal of the economy replete with appendices, charts and statistical tables designed to support Obama’s policy initiatives.

As a political document, the report is likely to find little favor in the Republican-controlled Congress. But as an assessment of the state of the economy, it broadly tracks with Republicans who say lack of wage growth is a critical flaw of the current recovery.

Middle class income is already emerging as a key economic issue for the 2016 presidential and congressional elections.

The report dates weaknesses in wages back to 1973 when productivity slowed and income inequality between the top 1 percent and the bottom 90 percent expanded. Starting in 1995, fewer Americans began to participate in the labor force, further compounding pressure on wages.

The document uses the data to buttress Obama’s domestic policy goals, including raising the minimum wage, increasing spending on education, overhauling the business tax system, and expanding international trade.

Republicans, who have majorities in the House and Senate, resist new spending initiatives and minimum wage increases.

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