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California Ok's Minimum Wage Hike; Zimmerman's Wife Doubts his Innocence; Blackberry Takes Another Hit; President Obama Speaks from PG Community College

Aired September 26, 2013 - 10:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

CAROL COSTELLO, CNN ANCHOR: Good morning. I'm Carol Costello. Thanks so much for joining me.

Congress's inability to compromise on just about anything is of course more than just political theater, because it affects all of us. The Dow has lost more than 400 points in the last five sessions because Wall Street is jittery over a possible government shutdown and debt default.

I got that word first-hand when I sat down exclusively with Gregg Steinhafel, the CEO of Target, the second largest retailer in the country.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: One, two, three.

COSTELLO: It's a great day for C.L. Gideons Elementary School kids in Atlanta, where a smile could be had for a song.

UNIDENTIFIED FEMALE: You got -- you got me babe and that's a lot.

COSTELLO: Target as part of its billion dollar commitment to education revamped the school's library and even stocked the shelves.

GREGG STEINHAFEL, CEO, TARGET: Giving back is part of our DNA.

COSTELLO: It's perhaps the most enjoyable part of Gregg Steinhafel's job, as the CEO of the nation's second largest retailer, the rest is challenging. But running any kind of business in an uncertain economy isn't fun.

STEINHAFEL: We were very encouraged in the beginning of 2012 and we got off to just a fantastic start and it seemed like the economy is really starting to gain some momentum and things softened up in the last half of 2012 and I think that we were expecting 2013 to improve more than it has.

COSTELLO: So Target is cutting back on holiday hiring. This year it plans to hire about 70,000 temporary workers, down from 88,000 a year ago. Instead, Target will offer more holiday hours to full-time staffers. Steinhafel insists the change is not because he expects sales to be down but because shopping habits have changed.

STEINHAFEL: This is a time where there is greater transformation going on in our business than we've seen in a long time and it's really the convergence of a lot of factors. It's the physical retailers needing to be more digital and it's digital retailers wanting to be more physical and bringing merchandise close to their guests.

COSTELLO: Steinhafel's company is also grappling with Washington and what he feels is an inability to come up with a cohesive plan for the economy. And then there's Obamacare.

STEINHAFEL: We spent a lot of time in Washington helping to shape that legislation and to provide credibility around what is a large employer, what are the challenges that are -- that faces Target. Clearly we're going to comply with everything but our -- our objective is really to help make the legislation better.

COSTELLO (on camera): A lot of companies are saying part-time workers, you know, go to the insurance exchange to sign up, we're not going to foot the bill anymore. So what is Target's stance?

STEINHAFEL: Well we haven't made any final decisions yet because our enrollment period is a little later than everybody else's. So we're still looking at how the law is being shaped and written, what other competitors are doing, and we are assessing the landscape to try and determine what's the right thing for us to do as a company.

COSTELLO (voice-over): A company that still has a major challenge ahead attracting holiday shoppers at a time when Target's retail sales have been soft -- key to turning Target's signature red into black.

(END VIDEO CLIP)

COSTELLO: And even though Steinhafel says Target has not -- not yet made a formal decision on health care, he does say Target continues to work with the Obama administration on tweaking the Affordable Care Act or Obamacare.

An additional $4,000, that's how much minimum wage workers in California can expect to make in a few years after the California governor, after the California Governor Jerry Brown, signed a rate increase boosting the minimum wage to $10 an hour by January 2016.

As you might expect, the move is drawing praise and criticism.

Joining me by phone is California Assembly Member Luis Alejo, who wrote the bill just signed into law and in Sacramento, John Kabateck California's executive director of the National Federation of Independent Business. He says the increase will hurt small businesses.

Good morning to you both.

LUIS ALEJO, CALIFORNIA ASSEMBLY MAN (via telephone): Good morning.

JOHN KABATECK: EXECUTIVE DIRECTOR, NFIB of CALIFORNIA: Good morning.

COSTELLO: Luis, I want to start with you. And why do you think it was so important for California's minimum wage to go up to $10 an hour? That would be the highest minimum wage in the country.

ALEJO: Well, first of all, this bill was a compromise. Having dealt with different business groups and different voices of opposition, we got this bill in the best shape but this bill would put California at the highest minimum wage in the country when it gets to $10 an hour. And I think that's reasonable. I think this bill gives the dignity and respect that our -- our families have been asking for so they can provide for their own families with their own hard-earned wages. So I think this is a big victory for over 2.4 million Californians that will benefit from this increase in the minimum wage in California.

COSTELLO: So -- so John this -- this minimum wage is going to be phased in over a period of a couple years. Will that -- to give small businesses a chance to adjust. Will that help?

KABATECK: Actually, no. I mean I think right now, what we're finding is -- I mean look at California right now. We already have the highest sales, income and gas taxes in the nation, the most frivolous lawsuits and regulations and now we have the highest minimum wage in the nation? I mean we're nothing if not pioneers in California.

Unfortunately, we're pioneers of high cost and that's ultimately going to hurt the very people the assembly member Alejo and others wished -- think that this is going to help. That's the entry level workers because small businesses are most of the minimum wage payers. This is actually going to hurt small business.

Where do you think this money comes from? They don't have a magic wand so ultimately, they are either going to be forced to raise their prices or more commonly, they're going to be laying people off or paring back shifts. That's the wrong message to send to -- not just to small owners but their employees as well.

COSTELLO: Well Luis, he has a point there. The economy isn't exactly roaring at this moment.

ALEJO: Well, we debated this bill at length here in California. We actually looked at what other states have done. All California's neighbors -- Nevada, Oregon and Washington, all have minimum wages higher than California, and there's no evidence at all of any adverse impact on jobs.

We also looked at the minimum wages for cities in California that have enacted minimum wages higher than the state which they require. San Francisco, San Jose all have minimum wages over $10 an hour currently. And in those cities, there also is no evidence of any adverse impact on jobs.

And in fact, it actually helps businesses because we all know then when workers make more, they're going to spend more. That extra money is going to go to paying their bills, paying for food and clothing, eating out at local restaurants. So (inaudible) will strengthen the economy because it does increase consumer spending which is an important part to strengthening our city economy.

COSTELLO: And John, I wanted to ask you about the wage gap of this country because it's growing ever wider. Wages for the middle class have stagnated. Businesses don't seem to be interested in raising their wages right at the moment. So why shouldn't the state step in and sort of take care of the problem for lack of a better term?

KABATECK: Because where the state has been stepping in, they have been doing severe damage to our number one job creator, mom and pop small businesses. Again, more regulations, more taxes, more lawsuits -- let's give small business owners a chance to be successful.

If we do that, actually they will be in a position to create more jobs, give more raises and actually thrive on Main Street. That's what the California and the American dream's all about. Unfortunately, the governor and legislature negotiated with public employee unions a few months ago, capping their wage increase at 4.5 percent only to see yesterday on Main Street them do that five times that amount. That's a double standard under the Capitol. And that's why not just small business owners the Californians and Americans should be outraged.

COSTELLO: Well we'll see what happens. Because it's the law of the land now it's going to go into effect because Governor Brown has signed it into law. So thanks to you both for being with me this morning-- California State Assembly Member Luis Alejo, NFIB California executive director John Kabateck thank you so much.

ALEJO: Thank you.

KABATECK: Thank you.

COSTELLO: We're back after a break.

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1045

COSTELLO: Checking our top stories at just about 45 minutes past the hour.

The ongoing drama between George Zimmerman and his soon-to-be ex-wife Shellie, taking another strange turn. Shellie speaking out once again, telling NBC that recent events including a face-off with George have changed how she views both him and his role in the Trayvon Martin shooting.

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SHELLIE ZIMMERMAN, GEORGE ZIMMERMAN'S EX-WIFE: I believe the evidence, but this revelation in my life has really helped me to take the blinders off and start to see things. MATT LAUER, MSNBC HOST: Let me make sure I understand. So you now doubt his innocence, at least the fact that he was acting in self- defense on the night that Trayvon Martin was killed?

ZIMMERMAN: I think anyone would doubt that innocence because I don't know the person that I have been married to.

(END VIDEO CLIP)

COSTELLO: Shellie Zimmerman filed for divorce earlier this month.

Later today, the Michael Jackson wrongful death case could go to the jury but first, the Jackson family attorney will end closing arguments with a rebuttal. He argues the family should get more than $1 billion from concert promoter AEG Live. The family claims AEG hired Dr. Conrad Murray and as you know the doctor was convicted of involuntary manslaughter in Jackson's death. The defense says Jackson picked his own doctor and is responsible for his own death.

Blackberry takes another hit. T-mobile, the nation's fourth largest wireless provider, is taking it off the store shelves. Alison Kosik is at the New York Stock Exchange. This is bad.

ALISON KOSIK, CNN CORRESPONDENT: I'll tell you what; add insult to injury Carol. Blackberry taking it on the chin yet again. This time from T-Mobile, saying that it plans to stop carrying, stop selling, Blackberry devices in its stores. An executive telling Reuters that keeping stock in the retail distribution system was inefficient since Blackberrys are mostly purchased by businesses, who don't do their shopping in the stores.

So this is just the latest blow in a string of terrible news for the company. Blackberry said last week it's cutting 4,500 jobs and said it would post an almost $1 billion with a "b" loss in the latest quarter. Earlier this week it said it plans to go private but you know, there are doubts whether there's going to be enough financial backing to make that happen.

You look at its shares, they're down more than 30 percent since the beginning of the year so yes, a very sad, sad story since Blackberry was really at the forefront of the Smartphone movement -- Carol.

All right. Alison Kosik reporting live from the New York Stock Exchange.

We are just minutes away from the start of President Obama's remarks. They will take place in Largo, Maryland. You see everybody's waiting there. White House officials say this talk will be a chance for the President to cut through the noise coming out of Washington and speak directly to the American people about the Affordable Health Care Law, Obamacare.

In just five days, the sign-up begins for the federal health care exchanges. The average American will have 53 different plans to choose from.

So I want to turn it over to my colleague now, anchor of CNN's "THE SITUATION ROOM" Wolf Blitzer. Hi, wolf.

WOLF BLITZER, CNN ANCHOR: Carol, thanks very much. The President as you point out only a few minutes away from his speech at Prince Georges Community College. That's in suburban Maryland right outside of Washington, D.C.

He's expected to speak for about 25 minutes. He's got a lot on his agenda when it comes to explaining what Obamacare is all about. And you're going to hear the President.

Joining us as we wait for the President: our senior white house correspondent, Jim Acosta; our chief political analyst, Gloria Borger; our CNN business anchor, Christine Romans. Our coverage of what the President is about to do will resume right after a quick break.

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BLITZER: And the President has just been introduced to this crowd in suburban Maryland right outside Washington, Prince Georges Community College. The governor of Maryland, Martin O'Malley, just introduced the President. He's going to be speaking a bit longer than we originally thought, probably 30 or 35 minutes, maybe 45 minutes.

He's got a lot to explain as far as Obamacare is concerned -- what it means, what it doesn't mean. There's a lot of noise out there. The President's going to try from his perspective to clarify.

(BEGIN LIVE FEED)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hello, Maryland!

(APPLAUSE)

Hello, PGCC!

(APPLAUSE)

Well...

(APPLAUSE)

It's good to be back in P.G. County. Give it up for one of the hardest working, most effective governors in the country, Governor Martin O'Malley.

(APPLAUSE)

Well, it is great to be with all of you here today.

(UNKNOWN): We love you!

OBAMA: I love you back (inaudible)

(APPLAUSE)

We also have a few folks who work so hard on behalf of the people of Maryland every single day, Senator Ben Cardin is here.

(APPLAUSE)

Congressman Steny Hoyer is here.

(APPLAUSE)

And Congresswoman Donna Edwards is here.

(APPLAUSE)

And all of you are here.

(APPLAUSE)

You know, sometimes you just need to escape Beltway politics for a little bit, even if you're just a mile or two outside the Beltway. Now, I know that a lot of you have seen some of the antics going on in Congress right now.

(LAUGHTER)

So -- so I wanted to take a little bit of time today to speak with you, the people who send us to serve, about something that is critical to our families, critical to our businesses, critical to our economy, and that is the reforms that we are making to our health care system.

There's been a lot of things said, a lot of misinformation, a lot of confusion. But there are few things more fundamental to the economic security of the middle class and everybody who's trying to get into the middle class than health care. For a long time, America was the only advanced economy in the world, where health care was not a right, but a privilege. We spent more, we got less. We left tens of millions of Americans without the security of health insurance. By the time the financial crisis hit, most folks' premiums had more than doubled in about a decade. About 1 in 10 Americans who got their health care through their employer lost that coverage. So the health care system was not working. And the rising costs of health care burdened businesses and became the biggest driver of our long-term deficits.

But this has always been about more than just statistics. Everywhere I went, as I ran for president back in 2007-2008, every place I've gone as president, I would hear stories from folks just like you of insurers that denied a child coverage because he had a pre-existing condition like asthma, of cancer survivors that had to choose between their home or their health care, how small businesses who wanted to do the right thing by their employees, but had seen their insurance premiums go up so high that they just couldn't do it anymore.

And these stories were personal for me, because I remembered my mom worrying about how she was going to deal with her finances when she got very sick. I remember the fear Michelle and I felt when Sasha was a few months old and she got meningitis, and we raced to the hospital, and they had to give her a spinal tap, and we didn't know what was wrong, and we were terrified, never felt so scared or helpless in all of my life, but we were fortunate enough to have good health insurance.

OBAMA: And I remember looking around that emergency room and thinking, what about the parents who aren't that lucky? What about the parents who get hit with a bill of $20,000 or $30,000 and they've got no idea how to pay for it? What about those parents whose kids have a chronic illness like asthma and have to keep on going back to the emergency room because they don't have a regular doctor and the bills never stop coming? Who is going to stand up for them?

In the wealthiest nation on Earth, no one should go broke just because they get sick.

(APPLAUSE)

In the United States of America, health care is not a privilege for the fortunate few. It is a right, and I knew that if we didn't do something about our unfair and inefficient health care system, it would keep driving up our deficits, it would keep burdening our businesses, it would keep hurting our families, and it would keep holding back economic growth. That's why we took on a broken health care system. That's why, with the help of folks like Steny and Ben and Donna, we got it through Congress. That's why we've been implementing it. That's why we are going to see it through. The Affordable Care Act is here.

(APPLAUSE)

I don't have to tell you it was a challenge to get it done. A lot of special interests who liked the system just the way it was fought us tooth and nail. Then Republicans decided it was good politics to fight it, even though the plan we proposed drew on a lot of Republican ideas.

But despite all the obstacles, the Affordable Care Act passed both houses of Congress. I signed it into law.

(APPLAUSE)

The Supreme Court ruled it constitutional.

(APPLAUSE)

Republicans in Congress have now voted more than 40 times to undermine or repeal it. Their candidate for president ran on a platform to repeal it. And at every step, they've been unsuccessful.

(APPLAUSE) Now, five days from now, five days from now, on October 1st, millions of Americans who don't have health insurance because they've been priced out of the market or because they've denied access because of a pre-existing condition, they will finally be able to buy quality, affordable health insurance, in five days. (APPLAUSE)

Pre-existing conditions, whether it's back pain or allergies, that were sticking you with sky-high premiums, those no longer will prevent you from getting affordable coverage that you need. That's going to happen in five days.

Now, of course, the closer we've gotten to this date, the more irresponsible folks who are opposed to this law have become. Some of the same Republicans who warned three years ago that this law would be Armageddon -- that's what they said, Armageddon -- now they're threatening steps that actually would badly hurt our entire economy, not because of the Affordable Care Act, but because of what they're threatening to do.

Some have threatened a government shutdown if they can't shut down this law. Others have actually threatened an economic shutdown by refusing to pay America's bills if they can't delay the law. That's not going to happen as long as I'm president.

(APPLAUSE)

The Affordable Care Act is here to stay.